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Author: 

U.S. Bureau of 
corporations. 

Title: 

Farm-machinery trade 
associations 

Place: 

Washington 

Date: 

1915 





MASTER NEGATIVE • 



COLUMBIA UNIVERSITY LIBRARIES 
PRESERVATION DIVISION 

BIBLIOGRAPHIC MICROFORM TARGET 



ORIGINAL MATERIAL AS FILMED - EXISTING BIBLIOGRAPHIC RECORD 



''KuslneM 
267 

run35 



v. S. Bureau of corporations. 

... Earm-machinery trade associations, March 15, 
1915. Washington, Govt, print, off., 1915. 

xvi, 368 p. diagr. 25*". 

At head of title: Department of commerce. Bureau of corporations. 
Joseph K. Davies, commissioner. 



1. AKriculttiral macliincry — Trade and manufacture — U. S. 2. Trade 
aliAiPM>f*awMnt associations — U. S. i. Title. 



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THE LIBRARIES 




GRADUATE 

SCHOOL OF BUSINESS 

LIBRARY 



DEPARTMENT OF COMMERCE 
BUREAU OF CORPORATIONS 

JOSEPH E. DAVIES, Commissioner 



FARM-MACHINERY TRADE 
ASSOCIATIONS 



MARCH IS, 1915 




WASHINGTON 

GOVERNMENT PRINTING OFFICE 

1915 



CONTENTS. 



ADDITIONAL COPIES 

0» THIS PtTBLICATION MAY BE PROCURED ROll 

rant suPEKrarxENDENT or documents 

GOTEBmCXNT PRINTINO OVHCB 

WASaiNOTOH, D. C 

AT 

m CSNTS PEE COPY 



Page. 

Letters of transmittal ^^ 

Letter of submittal n 

CHAPTER I.— ORGANIZATION AND DEVELOPMENT OF 

ASSOCIATIONS. 

Sec. 1. An organized industry \ 

Organization of manufacturers 2 

Jobbers' clubs 3 

Organization among dealers 4 

2. The development of associations 6 

System of distribution g 

Associations of manufacturers g 

State and interstate associations of dealers 9 

' Local clubs n 

3. Early activities of associations u 

CHAPTER II.— WHOLESALE PRICE ACTIVITIES OF MANU- 
FACTURERS' ASSOCIATIONS. 

Sec. I, Introduction 2I 

2. Activities of the National Wagon Manufeicturers' Association 22 

3. Activities of the National Plow Association 41 

4. Activities of the National Implement <fc Vehicle Association and its 

special trade departments 4$ 

National Implement & Vehicle Association 46 

Departments of the National Implement & Vehicle Association 47 

5. Significance of cost-accounting system in relation to selling prices 54 

6. Activities of the National Association of Thresher Manufacturers 55 

CHAPTER III.— EFFORTS OF MANUFACTURERS' ASSOCIA- 
TIONS TO REDUCE COSTS. 

Sec. 1. Introduction 57 

2. Standardization of materials 53 

National Wagon Manufacturers' Association 58 

National Plow Association 63 

National Implement & Vehicle Association 65 

3. Charges for transportation 67 

4. Fire insurance 74 

6. Limiting credit risks 76 

Cooperation in judging credits 76 

Sec uri ty for sales 79 

Credits in the thresher trade 60 

Improving financial condition of dealers 81 

0. Reduction in costs of distribution 84 

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IV 



CONTENTS. 



CHAPTER IV.— ACTIVITIES OF MANUFACTURERS' ASSO- 
CIATIONS WITH RESPECT TO LEGISLATION. 

Pwre. 

Sec. 1. Introduction 89 

2. Taaoition of corporations 93 

State taxation of foreign corporationfl 93 

Federal corporation tax 96 

3. Legislation relating to tariff and foreign trade 97 

4. Patentlaws 102 

5. Industrial indemnity and indemnity insurance 104 

6. Opposition to prison factory legislation 107 

CHAPTER V.-CONCENTRATION IN OWNERSHIP OF WIND- 
STACKER PATENTS. 

Sec. 1. Introduction HI 

2. Origin of the wind-stacker patents-license system Ill 

8. Controversy between the Indiana Manufacturing Co. and the J. I. Case 

Threshing Machine Co -. 114 

4, Results of settlement with the Case company 119 

5. Significance of the patents-license system - 125 

CHAPTER VI.— RESTRICTION OF RETAIL TRADE TO RETAIL 

DEALERS. 

Sec. 1. Introduction - 128 

The dealers' claim to the retail trade 128 

Negotiations with harvesting-machine companies 132 

2. Cooperation between federated dealers and organized manufacturers... 133 

Establishment of harmonious relations between dealers' and man- 
ufacturers' organizations 133 

Directories of regiilar dealers 134 

Commercial agency reports 136 

Conferences between representatives of dealers' and manu- 

focturers' organizations 136 

Opposition to manufacturers' branch retail tores 138 

Direct sales in localities where manufacturer has no agent 143 

Dealers' associations and the thresher trade 146 

3. Settlement of complaints against individual manufacturers 147 

Methods of adjustment by State associations 147 

Adjustment by cooperation with jobbers' clubs 150 

Methods of adjustment used by Federation 152 

Court decision against methods used by Iowa Implement Dealers' 

Association 154 

Changes in articles of association following court decisions 158 

Government investigation of protective activities of associations. . 163 

Plan of handling complaints in 1911 and 1912 172 

Negotiations with manufacturers relative to farmers' cooperative 

stores 175 

Opinions of the trade as to protective activities of associations 182 

Protective ac tivities not confined to implement trade 183 

4. Methods used with manufacturers unwilling to settle complaints amica- 

bly 185 

Information Bureau 186 

Information supplied by association secretaries on request of indi- 
vidual members 189 

Present methods of disseminating information among dealers 192 







CONTENTS. V 

Page. 

Sec. 5. Opposition to mail-order or catalogue houses 193 

Sales to mail order houses by manufacturers 193 

Parcel-post legislation 1^8 

Legislation against misrepresentation in advertising 202 

. Farm-paper advertising 203 

Chautauqua home-trade talks 206 

CHAPTER VII.— PREVENTION OF PRICE CUTTING AMONG 

REGULAR DEALERS. 

Sec. 1. Introduction 207 

2. Resale-price maintenance 207 

3. Price agreements among dealers 208 

4. Exchange of information through local clubs 211 

5. Prices based on uniform method of computing costs 218 

6. Significance of cost suggestions as a basis for retail prices 241 

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LIST OF EXHIBITS. 



I Constitution and by-laws of the National Implement A Vehicle Aflsociation. 246 
2! Constitution and by-laws of the wagon department of the National Im- 

plement &. Vehicle Association • • • * ^ 

8. Constitution and by-laws of tiie sales manageii* department of the National 

Implement & Vehicle Association ; 

4. List of officera and committees of tiie National Implement A Vehicle Assoa- 

ation, as of August 20, 1914 V:\"V"''':, i 

o. List of memben of the National Implement A Vehicle Association, as of 

August 20, 1914 ...........-•••• 

«. List of membew of tiie farm-wagon department of tiie NaUonal Implement 

A Vehicle Association, as of August 20, 1914 

7. List of members of tiie plow and tillage department of tiie National Imple- 

ment A Vehicle Association, as of August 20, 1914 :':r V"; 

8. list of memben of tiie grain drill and seeder department of tiie NaUonal 

Implement A Vehicle Association, as of August 20, 1914 ................ ^^ 

9. List of membeiB of tiie sales managers' department of tiie National Imple- 

ment A Vehicle Association, as of August 20, 1914.. - --- ^6-5 

10. list of members of tiie foreign-trade managers' department of tiie NaUonal 

Implement A Vehicle Association, as of August 20, 1914 ^ 

II Report of committee of National Wagon ManufacUirers' Assormtion, ap- 

pointed in November, 1903, to formulate a plan for tiie better mamtam- 
ingofprices; report made to association February 3, 1904............... 284 

12. Question sheet relative to prices of members, issued by tiie NaUonal Wagon 

Mwiufactureis* Association January 1, 1906 '.'"': I 

13. Kepiesentative sheets showing differences in standard specificaUons and 

equipment for farm wagons sold in different temtonee, adopted by tiie 
National Wagon Manufacturers' Association in 1908 .--.• -*» 

14. General letter issued by tiie National Wagon ManufacUirers' Association 

relative to trade conditions in December, 1908 ••" 

15. Revised tire list, wagon deparUnent, National Implement A Vehicle 

• . ^ ^^ 

Association . • 4 j * 

16 "Extra" or '^repair" price list suggested by special committee appomted at 

conference of farm-wagon manufacturers at Chicago June 5, 1912 272 

11 Biper on slandardization of farm wagons, read before AmencauSociety of 

Agricultiiral Engineers by E. E. Parsonage, of John Deere Wagon Ck)., 

December 30, 1913 ; " •• ^* 

18. Recommendations of the National Plow Association to its ^^^^^J^' 0^ 

ing list prices, standard specifications, equipment, etc. , 1907-1909 ...... -OZ 

B. Report of committee on shop costs and seUing expenses to NaUonal Associa- 

tion of Thresher ManufMrtareis, August, 1904 -• ^w» 

m Form of ficease contract used by tiie Indiana Manufacturing Co. autiiona- 

ing the use of its patents, 1914 ^w 

II. Form of patents-purchaie agreement between tiie Indiana ManufacUinng 

Co. aid HMBMii... 



LIST OF EXHIBITS. 



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Page. 

22. Form of royalty report required of licensee of Indiana Manufacturing Co. . 305 

23. Constitution and by-laws of the National Federation of Implement & 

Vehicle Dealers' Associations ^'^ 

24. Uniform articles of association recommended in 1904 by the National 

Federation of Implement & Vehicle Dealers' Associations for adoption 

by constituent associations 310 

25. Uniform articles of association recommended by National Federation of 

Implement A Vehicle Dealers' Associations for adoption by local clubs 

of dealers ^^^ 

26. Number of members of retail implement dealers' associations affiliated 

with the National Federation of Implement & Vehicle Dealers' Asso- 
ciations, 1901-1913 318 

27. Card entitled " Simple susgestions on cost figuring," issued in December, 

1909, for information of dealers 319 

28. "Cost suggestions No. 2," issued by Cost Educational Association in May, 

1910 V - 320 

29. Cost system reconunended for the use of the members of the National 

Implement A Vehicle Association 323 

80. Location and number of members of dealers' local clubs organized from 

January 29, 1913, to May 29, 1914 336 

31. The implement dealer and his problems. Address by the Secretary of the 

National Federation of Implement & Vehicle Dealers' Associations 
before the members of the National Implement & Vehicle Association, 
October 22, 1914 337 

32. Resolutions adopted by the National Implement & Vehicle Association 

at the annual convention held October 21, 22, and 23, 1914 349 



V 






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LETTERS OF TRANSMITTAL. 



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Department of Commerce, 

Office of the Secretary, 

Washington, March 15, 1915, 
Sir: I transmit herewith a report of the Commissioner of Corpo- 
rations on Farm-Machinery Trade Associations. This report deals 
with the activities of associations of implement and vehicle manu- 
facturers and dealers. 

Very respectfully, William C. Kedfield, 

Secretary, 

The President. 



#,# 



Department of Commerce, 

Bureau of Corporations, 

Washington, March 15, 1915. 

Sir: I have the honor to transmit herewith a report on Farm- 
Machinery Trade Associations, made to the President under your 
direction and in accordance with the law creating the Bureau of 
Corporations. This report deals with the activities of associations 
of implement and vehicle manufacturers and dealers. 

I desire to mention as especially contributing under my direction 
to the preparation of this report Messrs. Harry C. McCarty and 
Worthy P. Sterns, of this Bureau. 

Very respectfully, Joseph E. Davies, 

Commissioner of Corporations, 

To Hon. William C. Redfield, 

Secretary of Commerce. 



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Department of Commerce, 

Bureau of Corporations, 
Washington, March 15, 1916. 
Sir : I have the honor to submit herewith a report on the principal 
associations in the farm-machinery trade. 

AN ORGANIZED INDUSTRY. 

Ahnost every important manufacturer in the farm-machinery in- 
dustry is a member of the National Implement & Vehicle Associa- 
tion. The dealers in farm machinery have organized the National 
Federation of Implement & Vehicle Dealers' Associations, which is 
composed of niunerous State and interstate associations. These two 
organizations are national in scope and work in close cooperation. 

EFFORTS OF MANUFACTURERS' ASSOCIATIONS TO FIX WHOLESALE PRICES. 

In the earlier days the various associations of manufacturers of 
farm machinery, implements and vehicles, had agreements as to 
uniform prices. Such agreements were difficult to maintain on 
account of wide variations in the construction and cost of machines 
of different manufacturers. 

Later, the National Wagon Manufacturers' Association from time 
to time adopted recommendations that each member should advance 
prices by the same per cent. Active efforts were made to secure com- 
pliance with these recommendations. Prices for certain parts of farm 
wagons, approved by the association, were also recommended to mem- 
bers for adoption. 

The organized plow manufacturers use standard classifications, 
standard equipment for various implements, and uniform list prices 
on some of their products, with differentials for specified variations 
from the standard adopted. These prices are subject to such discount 
as individual members may desire to give. Advances in list prices 
have apparently been used as a means of advancing net prices. 

The National Association of Thresher Manufacturers has at va- 
rious times approved lists of net " amounts," or prices below which 
it was claimed members could not sell except at a loss. In 1909, 



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LETTEB OF SUBMITTAL. 



some members who were reported to liave engaged in price cutting 
were asked to reconsider their prices. 

Both the wagon and plow associations also attempted to secure 
greater uniformity in construction in order to facilitate price agree- 
ments. 

UNIFOBMITY OF COBfT ▲CCOUNTB AS A MEANS OF PRICE OONTSOL. 

The fe« of prosecution under the antitrust laws, as weU as prac- 
tical difficulties in making direct price agreements, led to other 
methods of influencing prices. 

Cooperation in efforts to maintain prices made it apparent that 
this object could be more easily attained if each manufacturer made 
full allowance for every element of cost as a basis for determining 
profitable prices. For this purpose uniform cost-accounting systems 
were devised in order that prices based on costs so computed would 
be sure to afford a profit. Costs were made to include not only every 
item of actual expense and depreciation, but also provision for in- 
terest on investment. This plan was adopted by the wagon and the 
plow associations and later by the National Implement & Vehicle 
Association, in which they were merged. 

Exchange of information regarding the costs computed in this 
manner and the prices actually received, affords a means for de- 
termining prices profitable to all. If the individual members fix 
their prices accordingly, substantial uniformity in prices may be 
established as effectively as by an express price agreement. 

■FFOirrS TO BEDUCaS CX>8T8 OF MANUFACTURE AND DISTRIBUTION. 

These manufacturers' associations have also attempted to increase 
profits by reducing costs. These efforts have been mainly in stand- 
ardizing specifications for materials and construction, in securing 
lower freight rates, in procuring insurance at reduced cost, in limit- 
ing credit risks, and in eliminating various items of selling expense. 

Some of the suggestions made for reducing the cost of selling goods 
are significant, especially the elimination of canvassers, commission 
contracts, and the sale of goods on exceptionally long terms. 

■FFORTS TO SECURE FAVORABLE LEGISLATION. 

Among "the matters of legislation to which the manufacturers' asso- 
ciations have given special attention are: Taxation of corporations, 
industrial indenmity, manufacture of implements and twine at State 
penal institutions, the tariff, and patents. 

Efforts of manufacturers' and dealers' associations to influence 
legislation, both State and national, have taken various forms. Mem- 
ben have been urged to write or telegraph to legislators at a givoi 



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LETTER OF SUBMITTAL. 



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time; delegates have presented the views of the associations before 
legislative committees, and these associations have cooperated with 
organizations in other branches of industry when legislation affect- 
ing their common interests was under consideration. 

The National Federation of Implement & Vehicle Dealers' Associa- 
tions is affiliated with the National Federation of Retail Merchants, 
and various manufacturers belonging to the National Implement & 
Vehicle Association are also members of the National Association of 
Manufacturers. These affiliations afford a means of cooperation with 
other trade associations in expression of views regarding proposed 
legislation. 

EFFECT OF CONCENTRATED CONTROL OF PATENTS ON PRICE OF WIND 

STACKERS. 

The wind-stacker attachment for threshing machines is sold at a 
uniform price; this is accomplished through a system of uniform 
patent-license contracts. The principal wind-stacker patents are 
owned or controlled by the Indiana Manufacturing Co., and most of 
the stock of this concern is owned by the managing directors of one 
of the chief threshing-machine manufacturing companies. Manu- 
facturers using these patents must pay a fixed royalty on each wind 
stacker made, and agree to maintain a uniform selling price. 

The particular facts with respect to this situation raise several 
questions of public concern, namely, whether the Indiana Manufac- 
turing Co.'s control of wind-stacker patents transcends the monopoly 
contemplated by the patent laws; whether the method by which 
various patentees are induced to pool their patents is obnoxious to 
the antitrust laws; whether the control of the said company by the 
managing directors of one of the licensees is compatible with public 
policy; and whether the said company may, in its license contracts, 
lawfully fix the selling prices of wind stackers made under its patents. 

THE CONTROL OF RETAIL PRICES. 

"^he prevention of price cutting among retailers and the raising 
of retail prices have been a matter of great concern to the implement 
and vehicle trade. 

The associations of dealers have sought from the beginning to dis- 
courage the practice of price cutting, and certain small associations 
in some instances have attempted to fix the prices at which their 
members should sell. Later, the principal associations gave consid- 
erable attention to the possibility of securing greater harmony among 
competing dealers by the organization of local clubs. At the meet- 
ings of these local clubs the question of prices was often discussed. 

Some implement manufacturers have sought the solution of this 
problem by fixing retail prices in their agency contracts with dealers, 



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XIV 



UlTTER OF SUBMITTAL. 



a practice which has been expressly favored by some dealers' asso- 
ciations. 

In 1909 a movement was inaugurated by the organized manufac- 
turers to secure the cooperation of all classes of the trade in aiding 
retailers to secure higher prices, by educating them to the necessity 
of computing all items of expense in fixing their prices. Cost sug- 
gestions enumerating such items were prepared by the manufacturers 
and given wide circulation among the dealers. The fact that the 
dealer's were urged to include in their costs allowances for interest 
on investment, rent of buildings owned and used, and salary for the 
owner of the business, clearly shows that these cost suggestions were 
intended as a method of establishing a basis at which dealers could 
sell at a profit. 

The success of this plan, however, requires that it be followed by 
all dealers in the same locality. The organized manufacturers and 
dealers therefore undertook a campaign to promote local clubs which 
should include all dealers in each locality. The local clubs were urged 
to adopt these cost suggestions but to avoid price agreements. 

The manufacturers' association has suggested that each local club 
should ascertain the average percentage of selling cost to sales for 
all of its members. The use of this average cost by each member in 
fixing his own prices at once suggests itself. 

Such a practice would tend to raise the general level of retail 
prices, and would militate against the independent action of dealers 
in the same locality in making pricea 

OPPOSITION OF DEALEHS TO DIRECT SALES AND SALES THB0I7GH IBREGULAR 

DEALERS. 

The fundamental idea of the federated associations of implement 
and vehicle dealers is that "to the retail dealer belongs the retail 
trade." They insist, especially, that it is wrong for any manufac- 
turer who sells through regular dealers also to use any other method 
of distribution which threatens to impair the trade of the dealers. 
Hence, they offer vigorous opposition to direct sales to farmers, to 
sales made through irregular dealers, and to sales through mail- 
order houses. 

The opposition to these forms of distribution is based on the claim 
that sales so made are made at prices which are demoralizing to the 
trade of the regular dealer, who is obliged to maintain a store with 
a stock of goods suflScient to meet the demands of the locality. The 
dealers' associations contend further that the plan of selling through 
a regular dealer is more economical for the manufacturer than any 
other plan of distribution, and that the dealer renders better service 
to the farmer. 



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LETTER OF SUBMITTAL. 

This claim of the dealers to the retail trade has been indorsed by 
the National Implement & Vehicle Association. The latter, and also 
various jobbers' organizations, have cooperated with the dealers in 
enforcing this claim. The dealers' associations have facilitated such 
cooperation in various ways, including the publication of directories 
containing the names of regular dealers. 

METHODS OP ENFORCING DEALERS' CLAIM TO THE RETAIL TRADE. 

The great problem of the dealers' associations has been to find 
some lawful means by which the members may be notified of the 
name of anv manufacturer who declines to confine his trade to the 
regular dealer. 

The adjustment of complaints against individual manufacturers 
who have made direct and irregular sales has been an important part 
of the work of the dealers' associations. When a complaint of this 
sort is filed with one of the associations, its secretary endeavors to 
arrange a settlement, sometimes by collecting a commission and se- 
curing a promise that such sales be discontinued. Most complaints 
are adjusted by the secretary. Complaints which can not be settled 
in this way are referred to a committee of the association before 
whom the manufacturer is sometimes invited to explain his position. 

Members of some of the earlier dealers' associations agreed to with- 
draw their trade from manufacturers who refused to settle com- 
plaints to the satisfaction of the dealers, and until within the last 
few years the names of such manufacturers appear to have been 
freely discussed before the entire membership of the various dealers' 
associations. 

An attempt in 1905 to install an information bureau to furnish 
dealers with the names of offending manufacturers and jobbers was 
not carried to completion owing to some doubt as to its legality. 
Members of the various associations have been notified, however, that 
upon request to the secretary of the association of which they are 
members they would be furnished with information as to the trade 
policy of any manufacturer. 

Court decisions adverse to such activities of dealers' associations, 
and investigations by the Government, have caused the federated im- 
plement and vehicle dealers in recent years to be cautious in handling 
complaints. At present the federated dealers' associations appear to 
rely principally upon the National Implement & Vehicle Asso- 
ciation and the various jobbers' clubs to persuade their members 
to confine their trade to the regular dealer. There are some manu- 
facturers, however, who will not sell exclusively through regular 
dealers unless they are compelled to. The dealers desire, therefore, 
to create amongst such manufacturers a belief that the dealers will 



X?I 



LETTER Ot SUBMITTAL. 



Withhold their patronage if they persist in ignoring the dealers' 
damis. As already noted, the National Federation of Implement & 
Vehicle Dealers' Associations is aflUiated with the National Federa- 
tion of Retail Merchants, and the latter organization has sought 
to secure legislation from Congress under which retail associations 
may legaUy furnish their members with information regarding manu- 
facturers whose trade policy they object to. . 

While the organized dealers disclaim any intention of maintain- 
ing a black list or of instituting a boycott against anyone, it is clear 
that If they be permitted to dissemmate information of this character, 
those loyal to the principles of their associations would refuse to con- 
tmue business relations with offendmg manufacturers even in the 
absence of am express agreement to do so. 

OPPOSmON TO MAIL-ORDER COMPETTnON. 

A determined fight has been made by the organized dealers against 
the competition of mail-order houses. They have not only tried to 
prevent manufacturers from supplying implements to such concerns, 
but also have conducted a campaign to prevent the establishment of 
a parcel post, on the theory that such facilities would benefit the 
mail-order houses. Since the establishment of the parcel post they 
have urged a revision of postal rates, with a view to increasing the 
charges on parcels. Their opposition to the mail-order houses has 
also been the reason for favoring a Federal law to compel all manu- 
facturers to brand their names upon their products in order to 
identify manufacturers who sell to mail-order houses, and for favor- 
ing both Stat^ and national legislation to prevent misrepresentation 
m advertising because of the belief that such laws would compel a 
modification of claims made in mail-order advertisements. The or- 
ganized manufacturers and dealers have also made earnest efforts to 
curtail the advertising facilities of mail-order houses by persuading 
manufacturers who sell through dealers not to advertise in farm 
papers which contain mail-order advertisements, or encourage buy- 
ing from mail-order houses. 

CDNCaLUSION. 

In conclusion it may be observed that while a large part of the 
activities of the manufacturers' and dealers' associations in this 
branch of industry are proper for the protection of legitimate inter- 
ests, yet there are others of doubtful legality which tend to limit the 
field of competition and to enhance prices. 
Very respectfully, 

Joseph E. Da vies, 

^ ^ Oommisaioner of Oorporatiom. 

The President. 



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REPORT OF THE COMMISSIONER OF CORPORATIONS 
ON FARM-MACHINERY TRADE ASSOCIATIONS. 



CHAPTER I. 



OEGANIZATION AITD DEVELOPMENT OF ASSOCIATIOKS. 

Section 1. An organized industry. 

Taken as a whole, the manufacture and sale of farm machinery, 
implements, and vehicles is one of the most important industries of 
the country. The aggregate investment of companies engaged therein 
amounts to over half a billion dollars. These goods are made in 
more than a thousand factories. The employees in these factories 
number more than 100,000, and probably nearly as many, in one 
capacity or another, are engaged in the wholesale and retail distri- 
bution of the product. Of these, over 40,000 are retail dealers. Re- 
tail sales of farm machinery, implements, and vehicles to the Amer- 
ican farmer can not be closely determined, but they amount to several 
hundred million dollars annually. The utility of this equipment in 
increasing the country's agricultural output is incomparably greater. 

While the total number of manufacturers engaged in this industry 
is large, the great bulk of the business is in the hands of a compara- 
tively few companies. The assets of one of these companies amount 
to about 125 million dollars. The assets of three others amount to as 
much more. Over three-fourths of the 40,000 retail dealers sell im- 
plements made by the International Harvester Co. Several other 
manufacturers are represented by from 10 to. 15 thousand dealers. 
Most dealers buy from a number of manufacturers, since no manu- 
facturer can furnish all of the extraordinary variety of articles 
included in the equipment of the modern farm. 

Probably over three-fourths of the capital invested in the manu- 
facture of farm machinery, implements, and vehicles is represented 
in the membership of the National Implement & Vehicle Associ- 
ation. This membership includes practically all the leading manu- 
facturers of such equipment.^ The National Federation of Imple- 
ment & Vehicle Dealers' Associations is not so representative. The 
membership of its constituent associations,^ however, includes large 



r 



1 See Exhibit 5» p. 259. 
e8248'— 16 ^1 



> See Exhibit 26, p. 318. 



2 



FARM-MACHINBKY TRADE ASSOCIATIONS. 



OEGANIZATION AND DEVELOPMENT OF ASSOCIATIONS. 



s 



numbers of the most influential dealers in those sections of the coun- 
try where the implement trade is of great importance. 

Practically all of the important farm-machinery trade associations 
in the United States cooperate with each other under the leadership 
of these two organizations. Harmonious cooperation between the 
manufacturers' associations and the dealers' organizations has 
always been a marked characteristic of their work. 

Organization or Manufacturers. — ^The National Implement & 
Vehicle Association was organized in January, 1911, as a consolida- 
tion of the National Association of Agricultural Implement & Ve- 
hicle Manufacturers, the National Wagon Manufacturers' Avia- 
tion, the National Plow Association, and the National Association 
of Grain Drill Manufacturers. The merger of these associations was 
largely due to the common interest of all branches of the industry in 
questions relating to raw materials, labor, transportation, legislation, 
retail distribution, etc., and to recognition that certain phases of these 
questions could be handled most effectively and most economically by 
a single association representing the entire industry. 

The executive committee in general charge of the association's 
activities has large powers. The immediate supervision of the work 
is in the hands of the secretary and general manager, who devotes his 
entire time to it. Standing committees consider and report on the 
more important divisions of the work. The sales managers of 
various members are onganized in a department to promote harmoni- 
ous relations between the salesmen of the different manufacturers 
and to improve conditions in the retail trade. (See Exhibit 9.) 

Special trade departments * of the association, which have their own 
officers, continue the work of the old wagon, plow, and grain drill 
associations * in matters of special interest to members in those lines. 
The most important matters to which these departments give atten- 
tion relate to conditions arising from competition between members. 
The secretary and general manager of the association takes an active 
part in the affairs of these departments. The executive committee of 
the association also maintains some supervision over their activities. 

The National Implement & Vehicle Association is incorporated 
under the laws of Illinois as an association not for profit. Its mem- 
bers are divided into three classes. Active members of the first class 
are manufacturers of agricultural implements, vehicles, and allied 

1 Tlie membership of these departments Is shown In Exhibits 6, 7, and 8. 

"Efforts to induce the Natiooal Association of Thresher Manufacturers to become part 
of the National Implement & Vehicle Association when that association was organized, in 
January 1911, were unsuccessful. However, some of the principal thresher manufac- 
turers belong to both associations, and the organization of a special thresher depart- 
ment in the Nation*! Implement & Vehicle Association has been considered. The organl- 
tttion of departments for carriage manufacturers and gas-engine manufacturers has also 
been proposed. Probably because of the existence of independent associations in these 
three branches, none of these departments has yet been organized. 



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lines. Active members of the second class are engaged m the whole- 
sale distribution of these products, but not in their manufacture. 
Associate members are manufacturers of materials and supplies pur- 
cha^d by implement manufacturers. Keceipts of the association in 
1914, based in part on an estimate of the treasurer in October, 
amounted to about $28,000, derived almost wholly from dues.^ The 
regular income of the special trade departments is nommal; each 
members pays small annual dues. „ . ., * 

Active members of the second class are entitled to all privileges of 
members of the first class except that they may not vote at elections 
or hold office. Associate members are entitled to all social privileges 
of the association, and to attend all general meetings except those of 
an executive character. They are not entitled to vote. They usually 
provide entertainment at the annual conventions of the active 

members." , , . ^ ^ i ^ u 

The annual meeting of the association is held m October of each 
year. At this meeting are read the reports of officers, the executive 
committee, and the standing committees, as well as a report of the 
attorneys of the association. These reports, which are submitted to 
the executive committee before being read, present a summary of the 
various phases of the association's activities during the preceding year, 
with recommendations for future work. This work is determined 
largely by resolutions incorporating the recommendations of the van- 
ous committees. The various matters touched upon in the resolutions 
are referred to the secretary or proper committee for action, or for 

report to the executive committee.^ 

Meetings of the executive committee, the standing committees, and 
of the special trade departments are held from time to time durmg 
the year. Members are kept advised in regard to matters of current 
interest by means of bulletins and circular letters issued by the secre- 
tary and general manager at frequent intervals. Matters that are of 
common interest to members requiring legal advice are referred to 
the attorneys of the association. . .« xu 

Jobbers' clubs.— Wholesalers, including representatives of the 
branch houses of the manufacturers and of other competing whole- 
sale concerns at the different jobbing centers, have organized clubs, 
through which the members may cooperate in remedying unsatis- 
factory conditions of common interest. Some of these clubs have 
now had fairly successful careers covering over a quarter of a 

iThP scale of dues paid by the different classes of members is shown in Exhibit 1. 

.The "foreword'' of a directory of the associate members, published by the association 
1„ 1913 contains the following : " This directory of our associate members and their 
war^aiso carries with It the suggestion that our active members give special considera- 
tion to these concerns in the making of contracts and the placing of orders. 

• The resolutions adopted at the convention held in October. 1914. are shown elsewhere. 
(See Exhibit 32, p. 349.) 



4 FABM-MAOHINEBT TBADE ASSOCIATIONS. 

century. Jobbers' clubs of considerable importance have been 
organized in Kansas City, Omaha, Minneapolis, Baltimore, Des 
Moines, Peoria, St. Louis, Sioux Falls, and Dallas. 

There is no national organization of the jobbers' clubs. This is 
probably due to the fact that the work of each club relates chiefly to 
conditions peculiar to its own market. Provision has been made, as 
already noted, to admit wholesalers to limited membership in the 
National Implement & Vehicle Association. Few have thus far 
become members. 

Organization among dealers. — ^The National Federation of Im- 
plement & Vehicle Dealers' Associations is composed of delegates 
from State and interstate associations of dealers. The aggregate 
membership of these associations is claimed to exceed 5,000 dealers. 
They constitute probably about one-fourth of the retailers regularly 
engaged in the trade in the principal grain-raising States, where 
nearly all these associations are located, and in some of these States 
the proportion is larger. Besides the Federation and its constituent 
associations numerous local clubs have been organized, composed of 
dealers who are in competition with each other in the same locality. 
The constituent associations have for several years pushed the organi- 
zation of these local clubs under the direction of the Federation. 
This work has been encouraged and given financial assistance by the 
National Implement & Vehicle Association. 

The object of the Federation, as stated in its constitution, is " to 
supply its constituent associations and their members with any and all 
legal and proper information which may legitimately come into its 
possession and which may be of interest or value to the same." 

The Federation enables its constituent associations to coordinate 
their activities along similar lines, such as collecting and disseminat- 
ing information, promoting favorable legislation and opposing meas- 
ures adverse to dealers, and encouraging the formation of local clubs 
of dealers for the general education of the trade in the cost of doing 
business as a means of preventing price cutting. It brings the com- 
bined influence of the constituent associations to bear on the settle- 
ment of differences between manufacturers and dealers in regard to 
trade policies and practices objected to by the dealers.* 

Each constituent association of the Federation is entitled to repre- 
sentation at meetings of that organization on the basis of one delegate 
for each 100 members or fraction thereof exceeding 50. Its affairs 
are managed by an official board, consisting of the president, vice 
president, and secretary-treasurer, and six directors. The three 
officers first named constitute an executive committee authorized to 
perform the duties of the official board between meetings of the 






V 



4 



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1 Begarding tlie actiTitiei of dealers' organlsatioiu, Me Bzhiblt 31, p. 337. 



ORGANIZATION AND DEVELOPMENT OF ASSOCIATIONS. 



§ 






latter. It is the duty of the secretary to receive and file infor- 
mation transmitted to the Federation by and through its members. 
It is also his duty to issue to constituent associations and their mem- 
bers a bulletin quarterly or as often as the official board may decide. 
It has also been customary for the Federation to recommend topics 
to be discussed at conventions of the constituent associations. The 
Secretaries' Association of the National Federation, organized in 
October, 1913, took over certain detail work of the Federation, such 
as arranging programs for constituent associations. 

State and interstate associations are organized under articles of 
association recommended by the Federation. Under these articles 
4^ any dealer having a regular established place of business, carrying 
an assorted stock of implements, vehicles, or hardware, reasonably 
commensurate with the demands of his locality, is eligible to mem- 
bership. The affairs of these associations are subject to the control 
of a board of directors. An executive committee composed of the 
president, vice president, and secretary-treasurer passes on questions 
of importance to the association between sessions of the board. Close 
relations exist between these associations and the jobbers' clubs. 

A meeting of the members of each association is held annually, at 
which the reports of officers and committees are read and discussed. 
These reports, especially that of the secretary-treasurer, review the 
activities of the association for the preceding year and make recom- 
mendations for future work. These reports are usually referred to 
the committee on resolutions for use in framing resolutions defining 
the attitude of the members on matters affecting their trade. 

The suppression of price cutting and the improvement of local 
trade conditions generally is the particular field of the local clubs. 
Their object, as stated in uniform articles of association recommended 
by the Federation, is " social enjoyment and entertainment, together 
with such benefits in a business way as will naturally be brought 
about by a feeling of fraternity and good fellowship among its 
membership." 

These articles provide for the definition of the territory within 
which dealers are eligible for membership; the qualifications for 
membership are the same as for the State associations. 

A dealer in applying for membership agrees to abide by all the 
rules and regulations which have been adopted for the government 
of the club, and also such rules and regulations as may subsequently 
be adopted. Provision is made for the expulsion of a member by a 
majority vote or for withdrawal on surrender of membership card. 
Any member going out of business is considered to have withdrawn. 

The officers provided for consist of a president, vice president, and 
secretary-treasurer, who ex officio constitute an executive committee. 
Standing committees on entertainment, grievances, and credits and 



i 



VABM'MAOHINEBT TRADE ASSOCIATIONS. 






collections are also mamtained. The grievance committee is ex- 
pected to investigate and adjust any difference arising between mem- 
bers of the club. It is the duty of the committee on credits and 
collections to devise and submit plans to promote the interests of 
members in respect to credit and collection matters. 

Sietioii 2. The deTelopment of anoeiatioiii. 

The farm-machinery trade reached the degree of organization de- 
scribed in the previous section only after some 30 years of associa- 
tiim effort. A general account of conditions in the trade that gave 
lise to the association movement, of different organizations that 
have taken part in that movement, and of the nature of their early 
activities is necessary to a full appreciation of the work done in 
later years described in the succeeding chapters, 

Syotem of distribution.— As the implement industry developed 
and it became profitable to seek a wider market, many manufac- 
turers found it desirable to form connections with jobbing houses 
at the wholesale centers. These jobbers, by buying from different 
manufacturers, obtained machines in demand throughout the year. 
They were thus able to employ their selling force more economically 
than the manufacturer whose output was small or in demand for 
only a few months in the year. Because of the large capital re- 
quired, these jobbers did not often handle threshers and bmders, 
which werj sold by the manufacturers themselves through general 
agencies located at wholesale distributing centers. 

The larger and more aggressive plow manufacturers, possibly be- 
cause their products are in demand so large a part of the year, 
established branch houses at the most important wholesale centers. 
They also added other lines, until now most implements not sold by 
the binder and thresher companies are handled by branch houses 
of the tillage-implement manufacturers. Some of the branch houses 
were owned jointly by noncompeting interests— plow, wagon, and 
seeder manufacturers, for example. This plan did not prove satis- 
factory Usually the plow mterests took over the whole enterprise, 
sometimes continuing to job the products of their former partners. 
On the whole, manufacturers have secured a constantly mcreasmg 
degree of control over the facilities of distributing their products. 

As the demand for farm machinery increased, its retail sale became 
of sufficient importance to be recognized as a distinct vocation. In 
most small towns in agricultural districts, the sale of farm equip- 
ment and aUied Imes was a profitable business for at least one man. 
There were few towns where the business was large enough to sup- 
port more than three dealers satisfactorily. Moreover, these dealers 
did not find it profitable to handle more than one or two makes of 






^ 






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OBGANIZATION AND DEVELOPMENT OF ASSOCIATIONS. 7 

any particular kind of machine. Under these conditions all the 
machines sold by the regular implement dealers in any one town were 
made by a relatively small number of manufacturers. When ma- 
chines made by other manufacturers were sold, the sales were made 
directly to the farmer himself, or through some one not engaged in 
the implement business as a regular dealer. 

In addition to the limited number of regular implement dealers in 
a given locality, the large amount of capital required to handle 
threshers, binders, and other expensive machinery has frequently 
made it difficult for manufacturers in these lines to find satisfactory 
local agents. Indeed, the thresher manufacturers have for years 
made a large proportion of their sales directly to the farmer or job 
thresherman, paying the local dealer a commission when he assists in 
making a sale. Local agents handle binders, but almost always on a 
commission contract, and are often assisted by the manufacturer's 
canvassers, experts, and collectors. Wagons, manure spreaders, and 
other somewhat expensive implements are sometimes sold on commis- 
sion, but more often on such long time that the economic relations 
between the dealer and the manufacturer are practically the same. 
Furthermore, the sales contracts used by the big plow houses leave 
title in the seller until payment,^ and often provide that credit on 
unsold goods shall extend into the next season. 

Under the system of distribution in the farm-machinery trade 
outlined above, except where monopolistic conditions of manufac- 
ture appeared, the business was peculiarly open to severe competition 
in prices or terms. In other industries, where the entire output of a 
manufacturer is taken by the jobbing trade, the temptation to cut 
both wholesale and retail prices is probably less continuous and less 
urgent than for the implement manufacturer, whose salaried em- 
ployees and agents are called on to make prices on thousands of 
individual sales throughout the season. So, also, there is no such 
inducement to make concessions in other industries in which the 
capital required in distribution is smaller and in which it is not 
necessary to employ so many trained and experienced men. Fur- 
thermore, in few trades of such importance are there so many retail 
dealers who enter the business without special training and who, at 
the close of each season, are so ready to close out their business 
and realize on their entire investment by a price-cutting campaign. 

An important counteracting influence is found, however, in the 
fact that the goods are almost entirely articles having a brand name 
and established custom. In building up this custom the dealer plays 
an important part, and it is to his interest to keep the agency of the 
lines he has promoted and to prevent any excessive price cutting 



» The use of the so-called " title " clause in agency contracts with dealers is referred to 
elsewhere. (See p. 80.) 






FAKM-MACHINEBY TRADE ASSOCIATIONS. 



"!> 



^ (I 



therein. In some lines of implements, moreover, the prestige, or the 
monopoly position of certain manufacturers, is so great that they can 
almost always obtain the best dealers and discontinue business with 
those who are less desirable. They are able not only to fix their 
wholesale prices but also to exert a strong influence on the retailer 
with respect to the prices at which the goods shall be sold to the 

farmer. 

Both the competitive and the monopolistic factors in the industry 
have, in different ways, contributed to a certain instability in the 
business and have had an influence in inducing the formation of 
trade associations. 

Associations or manufacturers. — ^The National Wagon Manu- 
facturers' Association was the first trade organization of any con- 
siderable importance in the farm-machinery industry. Its records 
give an account of a meeting as early as December, 1879. There 
were a number of meetings in 1880, but disagreements in regard to 
price policy soon developed, and the records show only one meeting 
in the years 1881-1885. Several meetings were held in 1886 and 
1887, this period of activity ending in an attempt to form a pool. 
Annual meetings were resumed in 1891 and have been held regularly 

since that year. 

Manufacturers of threshing machinery met to discuss credits to 
purchasers in 1884 and 1885, and organized an association in 1888. 
Manufacturers of binders met at Chicago in September, 1885, and 
discussed the price situation. The attitude of a single company 
defeated all attempted agreements. A similar attempt failed in 
January, 1888, because one company objected to the arrangement 
for enforcing agreements. Efforts to cooperate for mutual ad- 
vantage were also made by manufacturers of com planters in 1887, 
pumps in 1888, hay presses in 1889, and binder twine in 1890. In 
July, 1899, a meeting of grain-drill manufacturers held in Chicago 
indorsed an advance of 15 per cent in wholesale prices. No associa- 
tion appears to have been formed until June, 1902, when representa- 
tives of a number of the factories met* and organized the National 
Association of Grain Drill Manufacturers. 

During the eighties several associations of plow manufacturers 
were organized. All were shortlived except the Northwestern Plow 
Association, which was organized in 1887. That association met 
occasionally during the nineties. In June, 1899, the name was 
changed to the Northwestern Plow & Implement Association, and 
manufacturers of com planters, disc and lever harrows, and culti- 
vators were invited to join. Failure of efforts to establish standard 
prices appears to have caused the members to lose interest in the 
association. It is claimed that few, if any, meetings were held after 



* '\ 



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ORGANIZATION AND DEVELOPMENT OF ASSOCIATIONS. 9 

1903 and that the association had virtually passed out of existence 
in 1907, when the National Plow Association was formed. 

No organization of manufacturers to cover the whole implement 

1^ field was attempted, apparently, until the early part of 1894, when 

the representatives of some 20 prominent concerns in various branches 
of the industry met at Chicago and organized the National Associa- 
tion of Agricultural Implement & Vehicle Manufacturers to attend to 
matters of common interest. Although the implement trade at that 
time was suffering from an overproduction of machines following a 

^ falling off in the demand on account of the crisis of 1893, no attempt 

appears to have been made to restrict the output of the different 
^ ^ members nor to influence the prices and terms of their sales. 

To reduce the expenses of membership in two or more organiza- 
tions and to secure a greater degree of uniformity by vesting control 
of common interests in a single association, a consolidation of several 

A, of the principal associations was proposed in 1909. When this 

proposition was first made some opposition developed among mem- 
bers of the plow and wagon associations, who feared that if the plan 
should be carried out it would limit the effectiveness of their work. 

/ The plan of organizing special departments for the different 

branches of the trade appears to have met this objection, and the 

f- National Association of Agricultural Implement & Vehicle Manu- 

facturers, the National Wagon Manufacturers' Association, the 
National Plow Association, and the National Association of Grain 
Drill Manufacturers were reorganized as. the National Implement & 
Vehicle Association in January, 1911. 
State and interstate associations of dealers. — ^During the 

'♦ eighties attempts were made here and there to organize the dealers 

for the improvement of conditions in the retail implement trade. 
The most ambitious of these was a convention of the " Retail Imple- 
ment Dealers' Association of the West and Northwest," held in 

J Chicago in September, 1885. This association failed to obtain desired 

cooperation from the binder manufacturers and apparently never 

# held a second meeting. In the same way nothing further is heard 

of the Implement Dealers' Association of Northern Iowa, after a 
meeting at which its members assented to a schedule of retail prices 
prepared early in 1886. 

Hardly three years later, however, an association was organized 
which, since 1888, has steadily promoted the interests of the retail 

1^ implement trade. A meeting of a few dealers was held at Kansas 

City in the fall of 1888, and as a result, in February, 1889, the asso- 
ciation of Kansas Retail Implement Dealers was organized. Two 
years later, having admitted members from other parts of the 
Kansas City jobbing territory, most of whom were located in Mis- 



10 



FARM-MACHINEBY TRADE ASSOCIATIONS. 



souri, its name was changed to "The Western Retail Implement 
Dealers' Association," and later the word "Vehicle" was added. 
Since January, 1914, it has been the Western Retail Implement, 
Vehicle & Hardware Association. In 1889 there were about 20 
members; in the fall of 1913 about 1,600. 

In other sections of the country the early efforts of the dealers to 
cooperate through associations were not so successful. For example, 
a dealers' association in the Red River Valley of Minnesota and 
North Dakota was reported to be making a success of cooperative 
buying in 1889, but nothing further is heard of it. The Northwest- 
em Implement Dealers' Association was organized in St. Paul, Minn., 
in 1889, and in the early nineties State and interstate associations 
were organized in Illinois, Iowa, Ohio, Pennsylvania, New York, 
Michigan, Wisconsin, Nebraska, and Missouri. Some of these were 
very active for a time, but most of them accomplished very little. 

Smaller associations continued to be organized— a district asocia- 
tion in northeastern Nebraska in 1894; one in North Dakota and one 
in southeastern Nebraska in 1895; one in northern Iowa in 1897, and 
another in 1898; one in Montana in 1899; and one in southern 
Nebraska about 1900. Toward the end of the nineties it became 
clear that the Western association had demonstrated that there was a 
field of work in which State and interstate associations could be per- 
manently successful. It is a matter of no surprise, therefore, that 
about that time the dealers organized or became more active in Ohio, 
Indiana, Illinois, Kentucky, Minnesota, Nebraska, Iowa, North 
Dakota, South Dakota, and Texas. 

The most notable step in the organization of the retail trade was 
taken in 1900, when the National Federation of Implement & 
Vehicle Dealers' Associations was established. Delegates from the 
Western association, Illinois Retail Implement Dealers' Association, 
Iowa Implement & Vehicle Dealers' Association, the Nebraska & 
Western Iowa Implement Dealers' Association, and Retail Imple- 
ment Dealers' Association of South Dakota, Southwestern Minnesota 
& Northwestern Iowa met in Chicago September 21, 1900, to form 
a central organization to represent the general interests of the various 
State and interstate associations. The estimated membership of the 
associations represented in 1901 was about 2,000 dealers. 

In October, 1913, the Federation represented the 16 associations^ 
lliven below : 

Western Retail Implement & Vehicle Dealers' Association. 

Iowa Implement Dealers' Association. 

Tri-State Vehicle & Implement Dealers' Association. 

»At tlie last annual convention. In October. IftU. representatlvea were present from 
two other aasociatlons, namely, the Pacific Northwest Hardware 4 Implement AaaociaUoo 
and the Montana Implement Dealers' Association. 



OBGANIZATION AND DEVELOPMENT OF ASSOCIATIONS. 



11 



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Michigan Retail Implement & Vehicle Dealers' Association. 

Minnesota Retail Implement Dealers] Association. 

Texas Hardware & Implement Association. 

Illinois Retail Implement Dealers' Association. 

Wisconsin Retail Implement & Vehicle Dealers' Association. 

Mid-West Retail Implement Dealers' Association. 

Retail Implement Dealers' Association of South Dakota, 
Southwestern Minnesota & Northwestern Iowa. 

Colorado Retail Hardware & Implement Association. 

The Mississippi Valley Implement & Vehicle Dealers Asso- 
ciation, -r 1 J. T-W 1 7 

North Dakota & Northwestern Minnesota Implement Dealers 
A-Ssociation. 

Virginia & North Carolina Retail Implement, Machinery & 
Vehicle Dealers' Association. 

New York State Retail Implement & Vehicle Dealers Asso- 
ciation. O TT I.- 1 

Pennsylvania & New Jersey Retail Implement & Vehicle 
Dealers' Association. 

Their combined membership amounted to over 5,000 dealers. 

Local clubs.— Local clubs developed more slowly than the State 
and interstate associations. As early as 1896 the Western associa- 
tion recognized the importance of such organizations. Later, sev- 
eral State associtions undertook to establish local clubs to deal with 
local competitive conditions, especially the matter of prices. In 
October, 1907, it was reported to the National Federation that the 
movement had not been as general as had been hoped for. In recent 
years, however, the development of the cost educational movement 
has been attended by a vigorous growth of local clubs. (See pp. 

218-243.) 

Recently a number of district associations have been formed as 
branches of State or interstate associations among dealers in south- 
em Michigan, central Michigan, northwestern Ohio, and northern 
Illinois. They assist in the work of the larger associations, and also 
of the local clubs in the same territory. 

Section 3. Early activities of associations. 

To enhance the profits of their members is the prime motive of trade 
associations. Fixing a satisfactory price seems an easy way to solve 
the problem. It is not surprising, therefore, that a proposed advance 
of 25 per cent in the wholesale price of farm wagons December 16, 
1879,* is the first notable item found in implement-association records. 
In September, 1885, the Retail Implement Dealers' Association of the 
West & Northwest, just organized (see p. 9), asked the harvesting- 

■ ' 

lOn the above date the National Wagon Manufacturers' Association advanced the price 
of the standard farm wagon from $52 to $65. In February, 1880, there was another 
advance but, on reports of retail sales at $75 and of new manufacturers starting up, the 
price was reduced In May. Soon afterwards the leading concern asserted its Intention to 
make its own prices. 



12 



FABM-MACHINBBY TRADB ASSOCIATIONS. 



machine manufacturers to fix the retail prices of binders, which were 
regarded as being abnormally low, and to make the dealers forfeit their 
commission on all sales, if they cut these prices. The binder manu- 
facturers failed to grant the requests of the dealei-s. However, at that 
time and later the commission-agency contracts of some companies 
fixed the ntail price which the dealer was supposed to maintain un- 
der the terms of his contract In the same year the Northwestern 
Plow & Cultivator Association was said to have checked the alleged 
"ruinous" downward course of prices in their products.* In May, 
1886, the Implement Dealers' Association of Northern Iowa agreed 
on a schedule of prices for various machines. 

In 1886 and 1887 the members of the National Wagon Manufac- 
turers' Association attempted to form a pool. Production in excess 
of an allotted proportion was to be penalized. In the fall of 1887 the 
Northwestern Plow Association was hoping to relieve the situation 
by cutting down the output of its members, and it was reported in 
October of that year that uniform prices at a slight advance had been 
established. Apparently, the association secured a temporary im- 
provement in the situation, but in the fall of 1888 the failure of the 
association to "restore" prices was ascribed to the refusal of the 
smaller manufacturers to adhere to association prices and the conse- 
quent general violation of association rules. 

Apparently, associations of implement manufacturers have never 
attempted to exclude competitors as a means of restricting competi- 
tion in prices. As early as 1885, however, the regular retail imple- 
ment dealer had become convinced that profits could be protected 
only by excluding irregular competition— that of the blacksmith, the 
general storekeeper, the grain-elevator man, and the farmer-agent. 
This is shown in one of the suggestions of the Retail Implement 
Dealers' Association of the West & Northwest to the binder manu- 
facturers in that year, which reads as follows: 

Do not sell or appoint as agent any person who is not a legiti- 
mate implement dealer.* 
It does not appear, however, that anything was accomplished at 

that time. 

Association efforts similar to those noted continued intermittently 
throughout th6 decade, but they did not prevent a large reduction in 
implement prices from 1880 to 1890. Lower prices were the result 
of cheaper raw materials, improved manufacturing processes, larger 
output by individual concerns, and energetic competition among 
manufacturers. Moreover, the machines were being improved from 
year to year. The following prices for machines at Fort Dodge, 

ipiow mannlartiirerB In other sectlong of tbe country were working along the same 

Ilnea. 
•A UmltatkMi of the output wai also urged. 



OEGANIZATION AND DEVELOPMENT OF ASSOCIATIONS. 



13 



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Iowa, are believed to be representative of the decline referred to 
above: Binders sold for $315 in 1880 and for $130 in 1890; 14:-inch 
walking plows for $28 in 1880 and $14 in 1890; standard farm 
wagons for $85 in 1880 and $50 in 1890. The decline in the average 
price of 10 implements in general use was over 50 per cent. 

While efforts to raise prices were predominant in early associa- 
tion work, reductions of cost were by no means entirely neglected. 
An expense annoying to manufacturers has always been that result- 
ing from the abuse of the manufacturer's warranty by customers. 
Modification of the wagon warranty was one of the topics discussed 
at the National Wagon Manufacturers' Association meeting in De- 
cember, 1879. A conference of southern wagon manufacturers was 
called in April, 1888, to obtain, if possible, a reduction of the wagon 
warranty from 12 to 6 months. It was claimed in 1888 that the 
Northwestern Plow Association had reduced the selling costs of its 
members. An important topic in the discussions of the thresher 
manufacturers' association, organized in 1888, was methods of 
reducing losses on credits. 

The organization of the Western Retail Implement, Vehicle & 
Hardware Association^ in February, 1889, was in part for the 
purpose of bringing the combined influence of the members to bear 
on certain "methods adopted by the Kansas City Association of 
Implement Dealers^ in loading goods." The association expressed 
its belief that these methods constituted " an attempt to force us to 
buy of certain manufacturers." Transportation questions early en- 
gaged the attention of the associations. In 1893, one of the associa- 
tions cited the following cause of complaint: 'The inequality of 
freight rates charged by railroad companies, and the very great 
reluctance manifested by said railroad companies in paying for goods 
damaged, broken or lost by the carelessness of their employees." 

Proposed changes in the tariff and State legislation hostile to for- 
eign corporations in Michigan appear to have been the immediate 
reasons for the organization of the National Association of Agri- 
cultural Implement & Vehicle Manufacturers, which occurred on 
April 18, 1894. In addition to questions of State and National legis- 
lation and litigation in matters of common interest to its members, 
the association at once turned its attention to transportation and 
credit problems. The scope of its activities increased, and that of its 
successor, the National Implement & Vehicle Association, now covers 
the field indicated by the list of its standing committees.* 

iThen the Association of Kansas Retail Implement Dealers. 

■ This association was compof?ed of the wholesale dealers or jobbers at Kansas City. 

• The list of standing committees in 1914 is as follows : Advisory committee (composed 
of former presidents) ; agricultural extension; attorneys and litigation; credits and col- 
lections; dealers' associations; foreign commerce and tariff; freight transportation; in- 
snrance; manufacturing costs; membership; National legislation; patents; State legis- 
lation; and workmen's accident compensation. 



14 



FABM-MACHINERY TBAOE ASSOCIATIONS. 



It is evident, therefore, that associations in the farm-machinery 
trade even in their early years appreciated the importance of reduc- 
ing costs. They realized, however, that cost reduction was of no 
value without maintenance of prices. The course of prices has always 
been the matter of first concern with them. It is desirable, there- 
fore, before attempting further consideration of their activities to 
review some of the characteristics of farm-machinery prices. 

Variation in types of machines and their equipment as made by 
different manufacturers has always been a marked characteristic of 
the farm-machinery industry. This lack of a common type has ren- 
dered impossible any satisfactory statistical treatment or comparison 
of prices. Indeed, it has been impracticable to determine what should 
be accepted as standard types of wagons, plows, harrows, binders, 
etc., even for a single season. As will be shown later in Chapter II, 
the efforts of the wagon association and the plow association to secure 
standardization of the products of their members have been both 
energetic and persistent Their purpose is evident. The desired har- 
mony in prices could not be secured unless there was some way of 
determining the actual relation existing between the prices of differ- 
ent manufacturers. 

The difficulties in the way of establishing a standard plow are 
strikingly illustrated by the fact that as late as 1910 an official of a 
leading plow concern estimated that it was making 2,000 different 
styles of plow bottoms. Differences in equipment interfere with 
standardization quite as often as difference in design. For example, 
in 1907 the secretary of the National Plow Association was endeavor- 
ing to ascertain from the members which of nine different articles 
they included in the regular equipment of their gang plows. The 
great variation possible in the equipment of farm wagons is illus- 
trated by the list of extra parts shown in Exhibit 13, page 266. 

Differences in design and equipment are baffling, but added to these 
are the frequent changes in materials; iron or steel have been sub- 
stituted for wood, canvas for leather, pressed steel for malleable 

iron, etc 

Another marked characteristic of the business has been the manu- 
facturer's discrimination in prices to different customere and in dif- 
ferent localities. Discrimination almost invariably creeps in even 
under circumstances most favorable for maintaining uniform prices 
to different customers. It may appear in the price itself, m changed 
discounts, in special service— canvassing, exporting, advertising, 
etc.— in freight allowances, in extra parts, or in extra equipment. 
The methods are too numerous to mention and are often carefully 

concealed. 

Variations in prices on the same article in a single season are 
doubtless due partly to the uncertainty of the manufacturer or dealer 



V* 



m 



\ 



4 









ORGANIZATION AND DEVELOPMENT OF ASSOCIATIONS. 



15 



in regard to what competitors are doing and partly to the fact that 
machines left on hand at the end of one season may depreciate in 
value before the opening of the next. This price variation may be 
illustrated by the retail prices of farm wagons for one season. The 
Bureau found retail prices for 3J-inch skein standard wagons in 1911, 
running from $60 to $100. The prices of one that had a very large 
sale ranged from $65 to $90, while another leading make sold in one 
State as low as $62 and in an adjoining State as high as $85. These 
figures might easily convince an association price committee that 
prices had not been satisfactorily maintained. 

Such conditions, also, make it difficult to determine the general 
price level for a given season. Although satisfactory statistical 
treatment is, therefore, impracticable, some facts in regard to imple- 
ment prices are clearly established. The very great decline in prices 
from 1880 to 1890 has already been noted, although the exact extent 
is difficult to determine. Old machines, old horses, and old cows 
were often taken in trade at fictitious values. During this period the 
6-foot binder was sold to farmers as low as $65 in some instances, 
and at least as late as 1888 as high as $175. In August, 1890, an 
implement-trade paper reported that binder prices had never been 
more irregular and competition never more reckless than in that year. 
In June of the same year it reported the price of the binder in the 
United States as "about $145." Taken altogether, the evidence is 
convincing that the average retail price in that year was above $100 
and below $130, but it would be impossible to obtain an estimated 
average worth considering. 

This uncertainty of prices in the binder business largely due to the 
manufacturers' practice of contracting with irregular dealers (see 
p. 12), seriously affected the whole implement trade and for years 
was the chief concern of the retail dealers' associations. The better 
class of dealers had always been bitter against the use of the binder 
manufacturers' canvasser, which was later denounced by the Western 
association as " an unnecessary expense, a most prolific source of price 
cutting, and a demoralization of trade, not in keeping with good 
business principles." The dealer and canvasser, working together, 
often sold at lower prices, on longer terms, and to poorer credit risks 
than the dealer would accept when working alone. The attempts 
made in the eighties to have the binder manufacturers fix the retail 
price have already been noted. Later some of the leading manufac- 
turers printed retail prices in their contracts, and the attempted con- 
solidation of binder manufacturers in the fall of 1890 fixed the retail 
price of a 6-foot binder in its contracts at $135. Nevertheless, in 
January, 1892, the president of the Western association said that 
competition had brought profits so low that in many cases it was a 
question how long the dealer could hold out. 



18 



FARM-MACHINEBY TBADE ASSOCIATIONS. 



In view of these conditions, representatives of all the binder manu- 
facturers, who were really pushing their business in the great grain- 
growing section, met in Kansas City in December, 1891. As the 
result of this meeting a petition was forwarded to the general offices 
of the 11 companies represented, asking them to fix the wholesale and 
retail prices of their products. 

In January, 1892, the Western association of dealers adopted the 
following resolution: 

That it is the sense of the meeting that the wholesale manufac- 
turers do away with canvassers and agents and that the price 
given to these agents be taken from the price of the implements 
and given to the retail dealer, and that the manufacturer through 
his agent will cancel any contract with any retail dealer that is 
found cutting prices during the season. 
In the same year the chairman of the Western association's har- 
Toeler committee wrote: 

What we desire of manufacturers of harvesting machinery is 

that • ♦ ♦ they d^ould say how their goods should be sold, 

have fixed prices on the goods, and compel all agents to maintain 

prices and terms * ♦ *, 

Similar views were frequently expressed by representatives of the 

dealers at that time. 

At the close of the year 1893 the demoralization of prices in the 
harvesting-machine trade was reported to be as bad as ever, and it 
was stated that the efforts of the manufacturers to prevent price cut- 
ting had been frustrated by some manufacturer taking advantage of 
any agreement by cutting prices, but that a strong dealers' association 
could control the situation. 

In January, 1894, the harvester committee of the Western asso- 
ciation reported that the manufacturers recommended "that the 
retail implement dealers should establish a uniform retail price 
among themselves." At the same meeting, however, the president of 
the Western association said: 

It is not the province of this association to regulate prices in 
any way. It would be impossible if undertaken. 

State associations in Wisconsin, Pennsylvania, and Illinois gave 
considerable attention to prices in this year, and a local association in 
northeastern Nebraska is reported to have successfully maintained a 
fetail-price schedule during the season of 1894. 

The results obtained by the associations in their attempts to improve 
conditions in the harvesting-machine trade were so unsuccessful that 
during the second half of the decade most of the State associations 
either disbanded or practically suspended operation. The Western 
association not only maintained its existence but continued to grow. 
It held steadily to the price policy announced in 1894, but neverthe- 



OBGANIZATION AND DEVELOPMENT OF ASSOCIATIONS. 



17 






# 




less continued its efforts to bring about conditions under which retail 
prices would be maintained or advanced to a more profitable level. 

The Implement Dealers' Bulletin, established by the Western asso- 
ciation in 1896, was effective in this work. In 1896 it advocated the 
organization of local clubs as of paramoimt importance. In 1897 
special attention was given to the maintenance of territorial lines 
between agents for the same machine. In 1898 a letter was published 
suggesting that the manufacturers establish the margin of retail 
profit. But always the editor was urging the responsibility of the in- 
dividual dealer to maintain a profitable price. It does not seem pos- 
sible that the cordial relations arising from the annual conventions 
and continued admonitions of the Bulletin could have failed to have 
an appreciable influence on retail prices. 

It is not possible to measure the effects of these efforts to stop 
price cutting. The degree of success of dealers' associations in accom- 
plishing their purposes appears to have been largely measured by the 
number of members represented by its officers or committeemen in 
their negotiations with manufacturers. State and interstate associa- 
tions of dealers had, however, materially curtailed the number of 
direct and irregular sales, even when their members constituted a 
relatively small proportion of the total number of all dealers in the 
territory represented. Nevertheless, a single dealer outside the influ- 
ence of the associations could demoralize the trade of an entire county. 
Consequently, in later years, though the organized dealers continued 
to be active in soliciting members for their State and interstate asso- 
ciations, they became even more desirous of securing the membership 
of all eligible dealers for their local clubs. 

An account has already been given of the organization of the 
National Association of Agricultural Implement & Vehicle Manu- 
facturers in 1894. This association took much the same attitude 
toward wholesale prices as the Western association toward retail 
prices. The wagon manufacturers and the plow manufacturers con- 
tinued their meetings throughout the decade. It is not clear from 
the fragmentary information available that anything was accom- 
plished except to maintain more harmonious relations than would 
otherwise have existed and to give the different manufacturers more 
exact information as to the prices of their competitors. 

Apparently, implement manufacturers and implement-dealers were 
not greatly interested in association work in the later nineties, be- 
cause the great prosperity of the American farmer in 1897-1899 
brought with it equal, if not greater, prosperity for the implement 
business. At the close of the nineteenth century, however, the costs 
of raw materials in the implement industry showed a marked in- 
crease. For 20 years the manufacturers had pushed the substitution 
68248'— 15 2 



.-,1 






FARM-MACHINEBY TRADE ASSOCIATIONS. 



of iron and steel for wood. But even with the relatively decreased 
demand for wood materials the supply of hardwood was being ex- 
hausted in certain sections and its price was going up. The effect 
of the earlier large combinations in the steel industry and the world- 
wide boom in this industry which occurred at the close of the decade 
showed itself in the closing months of 1899, when prices averaged 100 
per cent higher than in December, 1898. At Pittsburgh gray-forge 
pig iron had advanced from $9.25 to $21.75, Bessemer pig iron from 
$10.45 to $25, and steel billets from $15.25 to $43. 

These conditions, which considerably reduced the very large profits 
of the years immediately preceding, brought the associations in other 
branches of the industry into renewed and effective activity and 
facilitated the combination of the chief binder manufacturers in a 
single company. The effects on the costs of farm implements are 
well illustrated by data available in regard to the binder business. 
A binder that cost $38 in 1898 and 1899 cost $50 in 1900. The aver- 
age price of all binders of this make sold in 1899 was about $90; in 
1900, a little less than $100. The aggregate cost of all machines 
sold in 1898 by one of the largest binder manufacturers would 
be increased about 17 per cent, if 1900 costs for the different ma- 
chines were substituted for the 1898 figures. The advance in its 
average selling price was about 9 per cent. Sales of machinery, not 
including repairs or twine, which amounted to between $19,000,000 
and $20,000,000 in 1898, for a certain group of companies increased 
to almost $29,000,000 in 1902. In spite of this increase of practi- 
cally 50 per cent in sales, statements from companies which did this 
business show that the net profit thereon fell off very markedly. 
These data show further that their cost of producing $100 worth of 
harvesting machinery in 1898 was only $42, while in 1902 it had in- 
creased to $51.* Their selling expense had also increased from $21 
in the earlier to $27 in the later year, and in consequence the profit 
declined from 37 per cent on net sales in 1898 to 22 per cent in 1902. 
Even imder these circumstances, however, they earned a high rate of 
profit on their investments. The average price realized for all 
binders sold by these concerns in 1900 was nearly $105, and in 1902 
less than $100. During these years, as earlier, concessions were fre- 
quent, and in some cases large. 

While no such precise data are available in regard to the situation 
in other branches of the industry, there is evidence that the factory 
cost of farm wagons, plows, and seeding machines also increased. 

The annual meetings of the wagon manufacturers during the 
nineties have already been referred to. Although in 1891 it was an- 
nounced that their object was not to advance prices, nevertheless 

^This increased manafacturlng cost was probably in part doe to the growing export 
trade and the larger production of rakes. 



'tt\ f H 



•1> 










OEGANIZATION AND DEVELOPMENT OF ASSOCIATIONS. 



19 



ft w 



prices continued to be their principal interest. In 1895, for example, 
a resolution adopted by the association asserted that an advance of 
over 50 per cent in the prices of material made an increase in selling 
prices necessary. In the two following years a conmiittee worked on 
the preparation of a uniform price list, but on December 15, 1897, 
this committee reported " that owing to the difference in construction 
of the various wagons made by the members of the association, it is 
impossible to formulate a uniform price list." 

The only meeting of the wagon association in 1897 was the one at 
which it received this report. There is no record of any meeting in 
1898. The members seemed convinced of the impracticability of 
/) filxing prices, and consequently of the futility of association work. 
But the latter conviction, if it existed, was short lived; in 1899 the 
association met seven times. Increased cost of materials and the 
necessary advance in prices was almost the only topic discussed. At 
a meeting April 6, 1899, 15 members gave estimates of the increase in 
cost of materials, which ranged from $3.45 to $5.07 per wagon. Two 
methods of dealing with prices were suggested at this meeting, 
namely, information as to each other's prices and independent action 
in advancing prices. At a meeting on June 21 an even more marked 
increase in costs was reported, and on September 6 the association 
recommended that prices for January 1, 1900, should be 20 per cent 
higher. 

In 1899 the wagon manufacturers sought to obtain a more powerful 
means of controlling prices, namely, the consolidation of the leading 
factories. Early in the year about 20 companies signed an agreement 
to combine their interests, but apparently they were not able to satisfy 
New York underwriters as to the prospects for a wagon trust. The 
project was not given up, however, for from time to time during the 
next 10 years different schemes were brought to the attention of trust 
promoters, and it was not until 1909 that apparently the conviction 
was forced upon the advocates of consolidation either that wagon 
manufacture did not lend itself to trust manipulation or that greater 
activity in the enforcement of the antitrust acts made such a course 
dangerous. 

Information in regard to the plow situation is even less definite 
than that in regard to wagons. The same evident dissatisfaction 
with the results of association work ended in an attempted combina- 
tion of interests in 1899. As the completion of the consolidation 
would necessarily take time, in order to meet the immediate emer- 
gency due to increased cost of materials, in Jime, 1899, the association 
recommended an advance of 20 per cent on plows, corn planters, 
harrows, and cultivators to take effect on the business of 1900. 

In the meantime, plans for the consolidation of the plow industry 
met with a much greater degree of apparent success than attended 



20 



]fABM-MACHIN£BY IBADE ASSOCIATIONS. 



* 

like efforts of the wagon manufacturers. In 1901 the American Plow 
Co. was incorporated, and stock was to be taken by nearly all the 
leading plow manufacturers, but finally the refusal of one or tw© 
important concerns to enter the combination defeated the whole 
project. Practically all effort at cooperation appears to have been 
abandoned until 1907. 

Up to the period of high cost beginning with 1899 the grain-drill 
manufacturers had cooperated in an informal manner, and as mem- 
bers of the National Association of Agiicultural Implement & 
Vehicle Manufacturers. The National Association of Grain Drill 
Manufacturers was formed in 1902. Apparently, however, some of 
the strongest manufacturers were convinced that association effort 
could not satisfy their purposes, and in March, 1903, about half the 
coimtry's output of grain drills was consolidated in the American 
Seeding Machme Co. 

The organization of the International Harvester Co., in August, 
1902, brought about 90 per cent of the binder production and over 
80 per cent of the mower production under the control of that com- 
pany. The formation of this consolidation was followed by the sub- 
stantial elimination of price concessions to dealers, although no 
formal advance was made in prices for several years. 



"^ 



« 



«V) 



m * 



^ 






f. VA 



CHAPTEK II. 

WHOLESALE PEICE ACTIVITIES OF MANTTTACTUEERS' 

ASSOCIATIONS. 

Section 1. Introduction. 

\ Trade associations of implement manufacturers have made various 

efforts during the last 15 years to advance prices for the benefit of 
their members. In view of the great complexity of implement-price 
statistics (see p. 14) , the great amount of time and expense necessary 
for the examination of accounts of individual companies, the wide 
variety of conditions involved in the operations of different concerns, 
and numerous other factors affecting the movement of prices that 
would have to be taken into consideration, it is impracticable to 
measure accurately the results of these efforts. The official records 
of these associations indicate, however, that a considerable influence 
has been exercised on prices, and sometimes they indicate its extent. 
They also show, at least in part, the methods which were adopted to 
influence the course of prices and the purposes which actuated the 
associations and their members. 

The general advance in commodity prices during the last 15 years 
is a matter of common knowledge. During this period substantial 
increases have taken place in the wholesale and retail prices of dif- 
ferent kinds of farm machinery and implements, though in some 
branches there have been at times marked decreases. Generally 
speaking, data gathered by the Bureau relative to the prices for these 
years show comparatively little uniformity of movement, and for 
most branches of the business the movements of prices might be 
largely accounted for by changes in the cost of production and dis- 
tribution or other normal influences of supply and demand. Never- 
theless, the prices of farm machinery have been frequently influenced 
to some extent, in some cases by monopolistic conditions and in others 
by concerted action of members of associations in particular branches. 

In some branches of the farm-machinery industry where advances 
had been particularly marked, improvements in the machines or 
advances in the cost of materials probably account in a large meas- 
ure for the increase in prices. For example, the advance in the 
prices of farm wagons has been especially notable, amounting to 
possibly 25 per cent, but during the period under consideration the 



AjS 



9ABM-MAGHIKEBY TRADE ASSOGIATION& 



WHOLESALE PBICE ACTIVITIES. 



23 



advance in the cost of materials used by wagon makers has probably 
been even greater. Materials, however, are only one element in 
the cost of production, and an advance in the cost of materials may 
be offset by reductions in cost in other directions, so that the total 
cost is not necessarily increased. For example, the margms between 
total costs and prices for the International Harvester Co. for most 
kinds of machines were higher from 1908 to 1911 than from 1903 
to 1907. However, for farm wagons, that concern, while doing about 
15 per cent of the business in the United States in 1910 and 1911, was 
making only a small profit thereon.^ 

In general, the farm-machinery business in the United States has 
been prosperous for well-managed concerns. The net earnings of 
the International Harvester Co. in 1911 were nearly three times its 
earnings in 1904. Furthermore, according to figures compiled by 
that company, the aggregate outstanding capital stock of 304 of its 
competitors increased from about $46,000,000 in 1902 to $228,000,000 
in 1912-13. Of these 304 companies, 107, or over one-thu'd of the 
total, were organized after 1902. Much of the new capital has been 
invested in the manufacture of farm engines, tractors, etc., the use of 
which has increased rapidly in the past few years. The number of 
new concerns formed to manufacture some of the older lines, such as 
plows, farm wagons, or grain drills, forms a relatively small propor- 
tion of the total. Such information as is available in regard to these 
branches of the trade does not indicate that the associations of manu- 
facturers producing these lines succeeded in enhancing prices in any 
marked degree. Nevertheless, the concerted activities of the associ- 
ations clearly show intent on the part of their members to increase 
prices and profits. 

In the following sections of this chapter is given an account of 
the activities of the various associations in regard to wholesale prices 
and terms, particularly agreements, recommendations, and measures 
calculated to produce a general enhancement of prices. 

Section 2. Activities of the National Wagon Mannfactnren' Association. 

The rapid advance in the cost of materials for farm wagons dur- 
ing 1899 and the consequent revival of association activity on the 
part of the manufacturers in that line have already been noted. 
(See p. 19.) At the meeting in September, 1899, when they decided 
to advance prices 20 per cent, a committee was appointed to receive 
estimates of costs and selling prices, but this action was reconsidered, 
as only about 10 of the 20 members present were prepared and willing 
to furnish these figures. 

^ Bei»ort of the Commissioner of Corporations on ttie International Harvester Co., p. 241. 



il); ' ' 



», 



^. 






i*4 



At the next meeting, on November 22, 1899, a greater degree of 
confidence in each other prevailed among the members. In address- 
ing the members the president ascribed unsatisfactory prices to 
mutual distrust and said that the worth of the association was in 
establishing confidence among its members. He held that informa- 
tion " coming from first hand " would steady the members and take 
away the fear which prompted them "to make ridiculously low 
prices." 

Full discussion followed regarding advances each manufacturer 
expected to make in 1900. At its close a committee on classification 
of wagons was appointed, and each one present promised to bring 
\ to the next meeting his estimate of the cost, f . o. b. factory, and the 
selling price of a 3-inch and 3i-inch wagon, with 26-inch poplar box, 
lazy-back spring seat, gear brake, and box brake. A motion "that 
all the discussion as taken down by the stenographer be eliminated 
entirely from the minutes of this meeting, and that it shall not be 
written out at all in longhand," was carried. Thus, they established 
the policy of free confidential discussion of each other's costs and 
prices, and study of actual conditions, which was effectively con- 
tinued through 1900 and 1901. 

At the meeting in December, 1899, reports of members on costs and 
selling prices were collected. These reports showed a striking dif- 
ference in costs and prices. The costs of a 3J by 10 inch skein, 
28-inch double-box farm wagon, IJ by | inch tire, lazy-back spring 
seat and box brake, f. o. b. factory, ranged from $30.65 to $46.70; 
the lowest time prices to dealers, in carload lots, from $47 to $61.56 ; 
to jobbers, from $43.25 to $54.50.\ 

Thus, wagons answering to the same general description showed 
variations in cost of over 50 per cent. These differences can be 
accoimted for by differences in specifications, in volume of output, 
and in efficiency of production, and partly also by differences in 
the method of cost accounting. Only the first of these conditions 
would have any considerable effect on quality. Therefore, the prices 
to dealers given above, which vary over 30 per cent, probably in- 
dicate the actual difference in the wagons themselves more accurately 
than the costs. 

As already noted (see p. 19), a committee had been appointed in 
1896 to formulate a uniform price list for farm wagons. Conviction 
of the impracticability of this plan led to its abandonment. It ap- 
peared practicable, however, to attempt the formulation of a uniform 
price list for tires and extra depths of boxes, and the committee was 
continued for that purpose. This was a simpler task, but the fol- 

* Apparently, the confidence of the manufacturers In each other was not so strong that 
the reports from different manufacturers were submitted to anybody but the committee 
which averaged them. The records were destroyed. 



24 



1"ABM-MACHINEBY TRADE ASSOCIATIONS. 



lowing remarks of the chairman of the committee at the meeting of 
December 20, 1899, are quoted in full, because of the indication 
they give of the difficulties of price control by the wagon manufac- 
turers: 

We got together to-day to try and get some kind of a report 
to present but ran against a great many obstacles and we come 
to you now for a little instruction. In the first place, one gen- 
tleman figures his iron at 2 cents; another at 2i cents, and a 
third at 2| cents. One man thinks he ought to figure iron at 
just what it costs him, and I believe in figuring at a little above 
cost, and then there was a question as to whether it was desired 
that we present a report as to the net amount to be charged extra 
for different widths and thicknesses of tires on different sizes of 
wagons, or whether we should present a list price. If a list 
price, then we have got to know something about the discount 
you want to figure. If a net price, we want to know something 
about how you figure your profit, and what profit do you want 
to make? 

My idea was that we figure all wide tires on a basis of 2^ 
cents; we figure iron at 2^ cents; it may not be that price to-day. 
It is possible some wagon makers buy it cheaper than that. It 
will cost at our place $2.26, while here in Chicago it will prob- 
ably be $2.28 or $2.29, and at some places over $2.40. 

We are not very far off on boxes, yet we do not exactly know 
how to present that report, whether we shall figure what the net 
price, or the gross price shall be. 

I would like to hear some expressions of the gentlemen here 
as to how they are accustomed to figure these things. I think in 
figuring wide tires you want to leave yourself some leeway, and 
I will say right here for myself that we are in the habit of figur- 
ing all our tire on the basis of. 2^ cents for iron, and then to our 
jobbers we figure to get 25 per cent profit over that. I figure the 
cost of a set of wheels with regular tires, and I figure the cost 
of a set of wheels with all variations and thicknesses and that 
is the difference in the cost; that takes in your labor and your 
wide rims, and the difference in making the weld and setting the 
tires. 
The committee was instructed to assume that iron used in the 
manufacture of farm wagons cost $2.30 f. o. b. Chicago and poplar 
lumber $40 per M feet. They were also instructed to take no account 
of the cost of certain accessories, namely, grain cleats, antispreader 
chains, and top-box fasteners. 

The actual extent, and also the lack of uniformity, in the advances 
made as the result of the resolution adopted in September, 1899 (see 
p. 19) , is indicated by statements by representatives of the different 
companies October 30, 1900, which read, in part, as follows : 

Company 1: " Our advance January 1, 1900, over January 1, 1899, 
was $8.50.'^ 
Company 2 : " Our advance, $8, over January 1, 1899." 



] ' 



WHOLESALE PRICE ACTIVITIES. 



25 



^> ^ ^ 



VI. 



« 



4> 



A 

4 



^ ■', •■# 



L 



Company 3 : " January 1, 1899 was a low-water mark in prices and 
our maximum advance was $10." 

Company 4 : " Can not give exact figures but our advance in price 
was $7 only." 

Company 5 : " Have reduced price $2.50 from highest notch and are 
now $5 over January 1, 1899." 

Company 6: "* * * an advance of $4.50." 

Of the 27 concerns that reported, 10 gave either $10 or 20 per cent 
as their advance on January 1, 1900. 

A drop in the price of iron in the early part of 1900 caused a meet- 
ing of the association to be called, in the belief that some of the manu- 
, facturers might be inclined to reduce the price of wagons. The fol- 
T lowing is a list of questions, which were answered by the 29 members 
* present at this meeting held in April, 1900 : 

(1) Have you made any concessions in prices since last meet- 
ing? 

(2) What do you think will be the course of the market in iron 
and other material during the next few months? 

(3) Do you think it advisable to make any reduction on the 
present price of wagons ; if so, how much ? 

(4) Will you agree to maintain present prices of wagons, imtil 
neit meeting of the association? 

(5) What is your situation in labor? 

At this meeting a member asserted that as the members had stood 
together on an advancing market they should do so on a declining 
one. The prevailing answer to question 4 in the list above was that 
prices would be maintained if other manufacturers maintained them ; 
that is, there was a definite agreement to maintain existing prices, 
although there was no uniformity in those prices. 

After full discussion by the members the following report of a 
committee was indorsed at the meeting of April 26, 1900 : 

Your committee concludes that there is nothing in the present 
situation which justifies any change in the price of wagons. 

That while the price of iron is slightly lower, indications are 
that a further material reduction will not occur in the immediate 
future. 

That the price of lumber is being maintained and dry stock 
more difficult to procure. 

That increase in the cost of production of wagons is greater 
by reason of the increased cost and scarcity of labor. 

That the present dull period was anticipated some time ago 
and your committee advise that the members of this association 
proceed with confidence to maintain their established prices. 

In September, 1900, however, because of the considerable reduction 
in the price of iron, although wood stock and other material and 
labor had not fallen, the association voted that if any member of the 
association deemed it necessary to reduce prices such reduction should 



20 



FABM-MAGHINEBY TEABB ABSOGIATIOK& 



I 



not b© more than 5 per cent below January 1, 1900, prices. On Octo- 
ber 30, reductions were reported, as follows: 

Company 1 : " Have reduced $2.50." 

Company 2 : " * * * we reduced nearly $3.'* 

Company 3 : " Have now reduced it $2." 

Company 4 : "Advanced $10 and reduced to $7.** 

Company 5 : " * * * have made no reduction.** 

Company 6 : " We have made no reduction under high prices, ex- 
cept in two cases." 

Company 7: "We figure our present prices same as January 1, 
1900." 

Nearly all reported reductions since the beginning of the year, but 

apparently prices were still over $5 higher than in the previous year. 
One of the members said, " Prices are up now and we ought to keep 
them up." 

In May, 1901, members reported their cost of production under 
the following instructions: 

Please fill out this sheet and bring it to the next mer;ting 
May 29, 1901. 

Do not sign, or make any other marks of identification. 

Please give your costs on the following wagons, and figure 
on the regular style, two-horse, cast-skein farm wagon, such 
as sold the Mississippi Valley trade, and do not include anti- 
spreader chains, top-box holders, nor grain cleats. 

Gears and beds (poplar) separately. 

I* * * ♦ # # • 

In figuring costs please be careful to include all material, 
labor and expense (general and incidental) ; in fact, total costs 
for delivery on board cars at your factory. Except coat of sell- 
ing. Base your figures on cost of May 15, 1901. 

A compilation was made from these reports, but the descriptions 
are so indefinite that the figures are of slight value. They show the 
same wide range of costs as before. At this meeting the association 
recommended an advance of 5 per cent on all shipments after July 1, 
1901, but in November, 1901, one-third of the members reported that 
they had made no advance. About the same number reported an 
advance of 5 per cent. 

The year 1902 was marked by dissatisfaction with old methods of 
work and* the adoption of new ones. It was asserted that the low 
prices complained of were due to lack of knowledge in regard to 
costs of production and distribution quite as often as to pressure of 
competition. A meeting on April 23, 1902, was devoted principally 
to an elaborate explanation of costs by one of the members. This led 
the association to enter into a " cost-finding campaign," referred to 
the next year as " the most important work yet undertaken by this 
association." 

In the discussion of costs by different members at the time of the 
institution of the cost-finding campaign it was brought out that the 



WHOLESALE PBICE ACTIVITIES. 



27 



i|» 



♦ 



i« -*' 



4> 



"4 



u 



charge for general expenses, or " co-expense," as it was called, varied 
from 38 per cent of shop-labor cost to 153 per cent of that cost. The 
total cost of a wagon as determined by reports at this meeting in 
April, 1902, varied from $35 to $48.37, with an average of $42.43. 
The records of the association, however, give no specifications for 
the wagon on which reports were made. It was voted unanimously 
" that each member pledges his word of honor that he will go home 
and figure in detail the present cost of his wagons and add to them 
a fair profit and immediately change his present selling price in 
accordance, regardless of what price his competitor is making." A 
form of schedule for collating costs on a uniform basis was pro- 
vided for the use of members. No rule appears to have been estab- 
lished, however, as to what was a fair rate of profit. Moreover, it 
is obvious that this method alone fails to bring about uniformity 
of prices, inasmuch as two concerns making substantially the same 
kind of wagon, but with different costs of production, would have 
to make different prices for substantially the same article. 

During 1902 a committee was appointed to take into consideration 
the possibility of improving terms of credit. It was found that 
any joint action in regard to terms was not feasible, and two years 
later the committee was discharged. 

An attempt to establish prices for tires in 1900 had apparently 
worked successfully, and the policy of making prices on parts was 
carried still further in 1902 by a vote that the selling prices of boxes 
and extra top boxes should not be less than 10 per cent over the aver- 
age cost as shown in the cost compilation. A price of 35 cents apiece 
was also established for lock chains, which had been furnished free 
by a considerable number of manufacturers up to that time. An at- 
tempt to fix the price at 25 cents a set for top-box fasteners failed. 
A committee on publicity was appointed for the purpose of spread- 
ing information in regard to the low return on investments in wagon 
manufacture and discouraging new enterprises. 

Recognizing that the great variation in wagons was unnecessary 
and made list prices on complete wagons impossible, a committee was 
appointed in the latter part of 1902 to make up standard specifica- 
tions based on the old Government standard wagon. A committee on 
cost accounting and one on the general reorganization of the associa- 
tion were also appointed. It had been found that the terms of manu- 
facturers' contracts with jobbers interfered in some cases with ad- 
vancing prices, but before the close of 1902 all members of the asso- 
ciation who sold through jobbers reported that their contracts pro- 
vided for advances in price in accordance with advances in the cost 
of materials. 

Relatively small results were obtained during 1903. The com- 
mittee on costs pushed its work energetically throughout the year. 



28 



FABM-MACHINBBY TBADE ASSOCIATIONS. 



A report from the committee on standardization was accepted, but 
apparently without direct results. The recommendation made by the 
committee on reorganization, for the employment of a commissioner 
who should have control of and regulate prices in the different 
localities for each manufacturer, giving due consideration to the 
usual difference in prices of the various brands of wagons, was con- 
sidered, but a new committee was appointed to formulate a plan for 
the better maintaining of prices.* A committee on labor statistics 
was also appointed and did more or less work during the year, but 
apparently without any important result. 

On February 3, 1904, the committee, which was appointed in the 
preceding November, to formulate a plan and recommend measures 
by which prices could be better maintained made a report.^ This 
report outlined the plan which formed the basis of the subsequent 
price policy of the association, and it should be noted that a similar 
policy has been followed by associations in other branches of the 
farm-machinery industry since that time. Starting from the ac- 
cepted fact that, because of variations in the specifications of various 
factories, it would be impossible at that time to fix standard selling 
prices for complete wagons, the committee recommended as a first 
step the establishment of a minimum price on boxes. It recommended 
that this, if successful, be followed by similar action in respect to 
other parts, such as seats, brakes, and extra width and thickness of 
tire. The preparation of list prices for a complete wagon, with uni- 
form variations of price in accordance with variations in specifica- 
tions, was suggested as a possible future undertaking. 

The committee recognized that the proposed work was one that 
could not be carried through successfully without thorough organiza- 
tion and the expenditure of a considerable amount of money. It 
recommended that an assessment should be levied upon each member 
of the association equal to one-quarter of 1 per cent upon the shop 
pay roll for the year 1903; that a committee, to be known as the 
executive committee, consisting of from 9 to 12 representative manu- 
facturers, should have charge of the work, and should employ a 
competent man as secretary. This secretary should gather detailed 
information as to materials, construction, estimated costs, and sell- 
ing prices under the direction of the executive committee, and should 
tabulate the information and present it to the committee without 
mentioning the names of members. The committee should then 
prepare a schedule of minimum prices on wagon boxes for different 

iThe committee was known as the Reorganlaatlon Committee. Its members were 
F. D. Suydam, of the MUbum Wagon Co., Toledo, Ohio ; W. C. Nones, of the Kentncky 
Wagon Manufacturing Co., of Louisville, Ky. ; E. Louis Kuhns, of the Studebaker Bros. 
Maimlacturing Co., of South Bend, Ind. ; C. A. Gelger, of the Troy Wagon Works Co., of 
Troy, Ohio ; and F. L. Mitchell, of the Mitchell ft Lewis Co., Ltd., of Bacine, Wis. 

* This report will be found In full as Exhibit 11, |^ 2M» 



WHOLESALE PRICE ACTIVITIES. 



29 



4 



classes of the trade based on this report and send a copy to each 
member of the association. This report should be the unanimous 
recommendation of the committee, and upon its adoption by the 
association all members thereof should agree to be governed thereby 
in their business. 

This plan was submitted to all members by mail. At the commit- 
tee meeting on April 15, 1904, it was reported that 39 concerns, 
having a pay roll of $2,500,000, were in favor of putting it into 
operation; 6, having a pay roll of $150,000, were opposed, and 11, 
with a pay roll of $270,000, were undecided. The committee then 
took charge of the work.^ They were asked to open their accounts 
to the secretary for evidence on prices and terms for boxes and other 
parts of wagons. This information was to be divulged to no member 
of the committee or of the association. At this meeting it was rec- 
ommended that a member representing the Southeastern Department 
of the association should be added to the committee. 

In carrying out the recommendations of the committee, the work of 
standardizing specifications and prices for parts of wagons was first 
undertaken. The secretary was instructed to obtain and tabulate 
information relative to wagon boxes, extra or tiptop boxes, box 
brakes, and spring seats. Each manufacturer participating was 
requested to send a copy of his latest catalogue and price list at once 
to the secretary. Shortly afterwards the question of standardizing 
wheel heights was taken up, and also the sizes for extra widths of 
tires on standard farm wagons for all territories. A schedule of 
charges for tires ^ adopted in October, 1900, was readopted in August, 
1904, as minimum prices to dealers, prices to jobbers being 12 J per 
cent less. It was voted that this list apply to all wheels regardless 
of height. Later, in 1904, a minimum price was adopted for gear 
brakes and for box brakes. 

At a meeting of the committee in August, 1904, it was decided that 
the minutes should be made to read "recommend" instead of 
"agree." The proceedings of the association in September of that 
year make it clear, however, that there was a definite purpose to 

^ In the meantime six more members were added to the five that had already been 
appointed (see footnote on p. 28). The committee then became known as the " Wagon 
Makers* Committee " or the " Committee of Eleven." Later it became the executive com- 
mittee of the association. The six members added were as follows : H. M. Kinney, of the 
Winona Wagon Co., of Winona, Minn. ; W. H. Weber, of the Weber Wagon Co., of Chicago, 
111. ; W. Schuttler, of the Peter Schuttler Co., of Chicago, 111. ; W. A. Rosenfleld, of the 
Moline Wagon Co., of Moline, 111. ; George R. James, of the James & Graham Wagon Co., 
of Memphis, Tenn. ; and Frank Slosson, of the Bain Wagon Co., of Kenosha, Wis. Sub- 
sequently, C. F. Milburn, of the Chattanooga Wagon Co., of Chattanooga, Tenn., also 
became a member of the committee as the representative of the southeastern department 
of the association, a separate organization composed of a number of farm-wagon oiana- 
facturers in the Southeastern States. 

« See Exhibit 15, p. 271. 



30 



FABM-MACHINEBY TRADE ASSOCIATIONa 



establish fixed prices on all parts sufficiently unifonn in character 
to make that course practicable. Their own opinion as to the char- 
acter of this policy is indicated by a vote of the association that— 

No member of this association in adopting any of these recom- 
mendations mention the association or this committee — that it be 
done of their own volition and that it is not proper information 
for the travelers, jobbers or dealers. 

In September, 1904, the association adopted the recommendation of 
the committee that a 26 inch by 10 foot 6 inch box, the shop cost of 
which was $10.52, should be sold to the jobber for $11.50 and to the 
dealer for $13. Other prices recommended and adopted were as 
follows: 




lO-indi «xtra top box 

Two-leaf spring seat, with lazy back. 
Feed boxes 



The allowance for grain cleats was fixed at 50 cents for metal and 
25 cents for wood. It was also decided " that the present prices for 
wagons shall be rigidly maintained for the coming year." 

In 1905 the work toward a more uniform product was pushed 
vigorously. In June standardized wheel heights were adopted, and 
the number of the different heights of wheels was reduced to five. 
It is said that 41 heights of wheels had been made by different manu- 
facturers. The secretary made a preliminary report on terms, and 
was instructed to select a territory in which it would be easy to bring 
about a favorable change and try to secure the views of the manufac- 
turers and jobbers and bring them together in conference. At this 
meeting the roll call of the members indicated that a large majority 
had complied with the resolution fixing prices on various parts of 
wagons. One of the manufacturers claimed that his concern had 
already saved several thousand dollars on minor parts in this way. 

At a meeting in November, 1905, the association decided to advance 
prices on 3i-inch wagons not less than $2 on January 1, 1906, .with a 
proportionate advance on other sizes. At the same meeting the 
secretary reported that he had made arrangements for a conference 
with jobbers and manufacturers at Kansas City on the subject of 
terms. The executive committee suggested " that the parties in in- 
terest • • • confer, with the object of bettering the conditions 
on terms." The association was pledged to lend all assistance 

possible. 

The progress of the work of the association gradually brought 
out the fact that its new policy looked to a more definite control of 



WHOLESALE PBICE ACTIVITIES. 



31 



f 



^' ' 1^ 



■~4 



prices and that the secretary was expected to investigate prices re- 
ported to him as below the recommendations of the association. 
Members were urged to give careful attention to their costs and to 
compilations of selling prices furnished them from information 
gathered by the secretary. Those who found their selling prices 
below the average were urged to advance them. In order to enable 
the secretary to carry on his work more effectively, in November, 
1905, it was recommended — 

That it be agreed that each member will, when called upon to 
do so, furnish to the secretary original papers such as letters, 
bills, contracts, for his information and guidance only. 

He was also instructed to visit each of the factories after this 
advance in price was made effective in order to verify the selling 
prices of the different manufacturers. 

In January, 1906, the secretary issued a bulletin beginning as 
follows : 

The sole purpose of this bulletin is to learn from each member 
the status of his prices for 1906 with relation to the increased 
cost and the resolution passed at our meeting November 16, 1905. 

Inclosed with this bulletin was a list of questions.* Concerning 
these questions, the secretary said: 

We must have the complete restoration of faith and confidence 
in each other, consequently only frank and absolutely depend- 
able answers will do to the questions I ask you to answer on the 
accompanying sheet. 

During 1906 the association gave considerable attention to costs 
of materials and standardization in order to reduce such costs, and 
work was undertaken for improving conditions in the retail trade. 
(See pp. 58 and 218.) Nevertheless, the principal interest of the 
association continued to be their effort to establish satisfactory prices. 
At a meeting of the executive committee in March it developed that 
existing methods were not satisfactory, because they allowed "con- 
siderable latitude on the part of individuals and the recommendations 
of the association [were] not carried out in a way that seemed desir- 
able." In the hope of obtaining better results, the secretary was 
instructed to ask manufacturers for " prices, terms of sale, discount 
for cash and place of delivery, upon which such wagons are sold to 
jobbers, semi jobbers, and retail dealers " in " Kansas City territory," 
"Minneapolis territory," "Southern territory," etc. 

It was also decided that when the association recommended an 
advance in prices " the trade shall be notified thereof by circular let- 
ters or postal cards, all of even date, to be mailed from each factory 
days before the date set for such new prices to go into effect." 

» This Ust of questions is shown In full In Exhibit 12, p. 265. 



O'CI 



FASM-HACM1N£B¥ TRADE ASSOCIATIONS. 



These notices were to be mailed on receipt of advice from the secre- 
tary and on a day to be fixed by him. 

The practice of a full discussion of costs, which had apparently 
worked so satisfactorily in the years following 1899, was continued. 
At a meeting in March, 1906, 17 manufacturers reported the increase 
in cost of producing a 3J-inch standard wagon over that of January, 
1005. These reports varied from $2 to $4.05. 

There was more or less^ anxiety in regard to the legality of work 
that was being undertaken by the association. In July the execu- 
tive committee submitted their proposed recommendations in regard 
to prices to their attorneys, who advised them " to go ahead " and 
that it would be safe to include the words " 5 per cent " in recom- 
mending the advance. The attorneys considered that the fact that 
prices at which wagons were sold were not uniform and that the 5 
per cent advance was merely recommended rendered the whole trans- 
action legal so far as the Sherman act or State antitrust statutes 
were concerned. Upon this assurance of the legality of their pro- 
cedure, the association adopted the recommendation of the executive 
committee : 

That every member of the association prepare a letter notify- 
ing their trade, including jobbers, of an advance of 5 per cent 
over present prices, to take effect from and after the date the 
secretary notifies them to send them out, and that the secretary 
notify them to date and send them out when he has received a 
copy of printed letter from every member of this committee and 
from such other members of the association who are not members 
of this committee as the secretary may deem necessary. 

Up to September 17, 1906, the secretary had received from 34 dif- 
ferent manufacturers their letters announcing this advance, which 
were to be sent according to his instruction on September 15. 

At an executive committee meeting later in the year the secretary 
called attention to the differences in the cost figures submitted. It 
was admitted by all that mistakes had been made, that the subject of 
costs was not thoroughly understood by all members, and that it was 
essential to have accurate figures to work upon in determining what 
course to pursue in the matter of prices. Nevertheless, one member 
of the committee said : 

The question of costs of your wagons given in the association 
will do and has done more to bring the wagon business up to 
where it is now than any other one subject. 

This comment is interesting because of the claim for effective 
work by the association. In this connection the member said: 

While we can not undertake to regulate selling prices, we 
can educate those that are making these lower reports as to their 
costs, and we can accomplish a whole lot of good that will not 
show in open meeting, but will show in personal results. 



WHOLESALE PBICE ACTIYIHES. 



33 






4 



Commenting on these remarks, the president of one of the impor- 
tant companies advocated additional help for the secretary, saying : 

An association with the money invested that this association 
has, can well afford to spend $2,000 or $3,000 a year more money 
if we can by doing that get a balance wheel for everybody, and 
a man in whom we have confidence that when he shows us or 
tells us that we are in error regarding what the other fellow is 
doing that we will believe him. ♦ ♦ ♦ Now, if I have been 
in error to start with I will continue to be in error, but if he 
finds that I have figured a certain wagon much below the aver- 
age, why, when he comes to our place, he says, "How do you 
figure that a 3 J wagon figures what you have ? Let me see your 
figures ? " and I give them out, and he says, " You are wrong on 
your wheels," or You are wrong on your gear; " I am only too 
glad to change it as I am getting expert help at a minimum cost. 

In spite of the dissatisfaction with results referred to above, it was 
reported that estimates of the money value of the association made 
by different members were very gratifying and showed that the dues 
paid by the members were profitable investments. 

Reports to the secretary late in 1906 and early in 1907 illustrate 
the great range in prices received by manufacturers for 2-horse farm 
wagons. The prices reported were the lowest at which the manufac- 
turer would sell. In Kansas City and Dallas territory, minimum 
cash prices on 3J-inch wagons to the dealer by carloads at the factory 
varied from $51.30 to $65. The time prices for the same wagons 
were $54 and $70. There is no information available as to the 
maximum prices received by the individual manufacturer, but if they 
were known the variation shown above would probably be increased. 

However, uniformity is not essential to a general advance in prices, 
and at a meeting in March, 1907, it was voted to recommend that 
every member immediately prepare a letter notifying his trade of an 
advance of 5 per cent in his prices on wagons, extras, and repairs, 
to take effect as soon as the members should be notified by the sec- 
retary that he had received a printed letter announcing the inten- 
tion of every member of the executive committee to make the ad- 
vance, and also of as many other members as the secretary might 
deem necessary. The secretary fixed April 20 as the date when the 
advance should go into effect, and members were urged to send their 
letters promptly to the trade. An inquiry made by the secretary 
shortly afterwards indicated that the advance had been made by 
almost every member, as well as by the International Harvester Co. 
and the Studebaker company, two of the largest manufacturers of 
farm wagons outside the association, and also by various jobbers. 

In June, a similar inquiry was made to ascertain the extent to 
which the advances on tires, boxes, and extra boxes recommended by 
68248'— 15 8 



t) 



S4' 



FABM-MACHINEKY TRADE ASSOCIATIONS. 



the association had be^ put into effect. It was found that the recom- 
mendations had been followed by nearly all the members. The 
secretary announced his intention of visiting the factories of various 
members who had not put the recommendations into effect, in order to 
take the matter up with them. 

Meantime, several members appear to have become apprehensive 
that the action taken by the association in advancing prices was 
illegal, and at a meeting of the executive committee held in June, 
1907, the secretary read several communications from members on 
the subject and stated that he had replied to them that the associa- 
tion was in no way violating the National antitrust laws, and that 
there seemed no grounds for apprehension, as the work and procedure 
of the association was and had always been merely recommendatory 
•ind in violation of no law. A committee was appointed to report on 
the matter later if necessary. A few days later the secretary issued a 
bulletin on the subject of antitrust legislation. This read, in part, 
as follows: 

The three essential points to the National act and the real basis 
of all State acts on this question are these : 
The entering into a fixed or binding agreement between two or 

more persons. 

The fixing of price on any article of commerce. 

The controlling or regulating of the volume of output of any 
article of commerce. 

You certainly are aware that we do not do any one of these 
three things, for in every case, whatever advice we give, it is 
merely in the nature of a recommendation with no penalW at- 
tached to its nonacceptance or nonperformance, and I am frank 
to say to you that we never passed a recommendation that was 
carried out unanimously by every member of the Association, 
and were it not for the fact that the large majority who receive 
these recommendations recognize their wisdom and business 
value, they would amount to nothing, as every member is at lib- 
erty to accept or reject them at his pleasure, so that in following 
the recommendations that we pass you are not violating the law 
any more than if these recommendations or suggestions were sent 
out in book form as the wisdom of some individual author; so 
I trust if you have any apprehension on this score, this explana- 
tion, which is based on fact, will dispel it 

This matter was again taken up for consideration at a meeting of 
the association held at Chicago in September, 1907, and on advice of 
an attorney who had been consulted it was voted " that the actions 
of this association recommending minimum or fixed prices for extra 
wagon boxes, spring seats, brakes, lock chains, or any other parts of 
wagons, be now rescinded and that all such action be expunged from 
the minutes." One of the members present called attention to the 
fact that this resolution only expunged those recommendations that 



f 



<! 



tV 



i 1 



^^ 



4 



WHOLESALE PEICE ACTIVITIES. 



35 



established fixed prices, but still left in effect the percentage ad- 
vances that had been recommended both on wagons and the parts of 
wagons. 

The general question had already been considered by the executive 
committee at a meeting held just prior to the meeting of the general 
association. The point was raised whether, in view of the fact that 
questions were continually coming up as to the legality of the proceed- 
ings under the antitrust laws, it would not be well to have some 
attorney present at all meetings of the executive committee and of 
the association, so that if members got " on dangerous ground " the 
attorney could check the matter " then and there." One member of 
the committee said : 

My idea is that there is a good deal in the phraseology you use, 
and we can pass the resolution and then let the secretary consult 
with the attorney and put it in the proper shape to avoid trouble, 
but the substance, the meat in the resolution, can be preserved. 

At a meeting of the executive committee held at this time an 
advance in the prices for 1908 was recommended. Although a major- 
ity of the members of the association favored an advance of 5 per 
cent, it was voted to recommend that the members of the association 
should not take any orders for shipment beyond March 1, 1908, at 
the prices then prevailing. An effort was also made to improve the 
terms on which wagons were being sold. 

It was thought that the increase in the costs of manufacture justi- 
fied better prices for wagons, and in this connection the secretary sug- 
gested that at definite times in each year the questions of costs and 
price adjustment should be considered, and that each manufacturer 
should fix certain dates between which orders might be taken at prices 
then prevailing. 

A little later the effects of the financial depression of 1907-8 
began to be felt. At a meeting of the executive committee in Decem- 
ber, 1907, it was decided that under the existing conditions it would 
be unwise to suggest any price policy for 1908 except to recommend 
that the existing prices be maintained and that no wagon maker 
should take orders for shipment later than July 1 except at an 
advance. A meeting of the association was also held in December 
1907, at which a resolution was adopted urging its members to 
discontinue the use of the commission contract, and further resolu- 
tions were passed defining the terms for commission contracts when 
used, and fixing maximum terms on straight sales in different sec- 
tions of the United States. The object in both cases was to shorten 
terms of credit as much as possible. In June, 1908, the recommenda- 
tion in regard to terms was reaffirmed by the association, and " each 
member was urged to continue shortening their selling terms in every 
territory wherever possible." 



S6 



FABM-MACHINERY TRADE ASSOCIATIONS. 



At the meeting in December, 1907, the members of the association 
also voted to cooperate in furnishing information to a committee ap- 
pointed for each distributing territory to look into the subject of a 
standard price list and equipment for complete wagons. In carrying 
out this plan the secretary issued a bulletin in February, 1908, which 
read, in part, as follows: 

You will recall that at one of our recent meetings the pre- 
paring of a STANDAiu) or UNIFORM PRICE LIST was recommeuded. 
Tliis proposition has been before the wagon manufacturers 
several times during the past 25 years, and although much de- 
sired, never has been quite successful; but as nothing of this 
character is impossible, we are going to make another effort, 
which I am sure will be successful with your cooperation. 

Our first attempt will be to find a base wagon, and to ascer- 
tain how a standard wagon should be equipped in each sellmg 
territory, which will draw the line between necessary equipment 
and extras that are often given awav and unnecessary. 

Another benefit that should be derived is the equalization of 
differences that now exist between sizes of the same description 

of wagon. ...... .11 i_ . *^ 

We trust, therefore, that special attention will be given to 

filling out and returning promptly the enclosed blanks, which 

we are only sending to those akeady having trade m certain 

selling territories. 
As a result of the investigation thus undertaken, a list of standard 
equipment for each territory was adopted by the association in 
December, 1908.^ (See Exhibit 13, p. 266.) 

The industrial depression of 1908 was especially trymg for manu- 
facturers of farm wagons. For several years sales had been pushed, 
and the falling off in demand found large stocks in the hands of the 
dealers. Under these conditions factories were not operated on full 
tune. In April, 1908, the executive committee recommended to the 
association that the curtaihnent of production, which had apparently 
been initiated by the manufacturers severally, be continued and that 
selling prices be maintained. The secretary reported that the 5 per 
cent advance in prices that had been recommended in 1907 had not 
only been made effective, but had been maintained during the inter- 
vening months of light trade. In June, 1908, the association re- 
affirmed the recommendations regarding output and prices that had 
been adopted in April. It was felt by some of the members that as 
overhead expenses had not decreased in proportion to sales it would 
hardly be fair to take costs as a basis for selling prices. 

Some idea of the strain under which the industry was laboring 
at this time may be obtained from the fact t hat the number of 

iln referring to the purpose of making this compilation, the secretary made the follow- 
inc remarks at a meeting of the executive committee in April. 1908 : 

thit^tU^e^s^m^s?^ ':Jr.o'lVl^^^^.x:kl^^^^^ 

£ ihat is U8^^ the territory, and prevent a member going into a new terrltorj. 
SrMshlng a lot of extras not required and without charge. 



^ 



WHOLESALE PRICE ACTIVITIES. 



37 



H 



%^ 



»• 



»\ 



•y 



wagon manufacturers as listed by a leading trade paper decreased 
from 129 in 1906 to 98 in 1909. This was not due to any extensive 
consolidation of competitors. The executive committee, convinced 
of the need of exact information in their efforts to improve the 
situation, agreed to submit to a leading firm of certified public 
accountants full information as to actual conditions in their busi- 
ness for the five years 1903 to 1907, inclusive. This seems to have 
been the first resort to the help of such experts. Apparently nothing 
was accomplished at that time, but five years later a very complete 
report on the costs of wagons in the factories of leading members 
of the association was made by them. (See p. 52.) 

Toward the end of 1908 the trade situation for the farm-wagon 
manufacturers became even more difficult. The rapidly increasing 
use of the cheap farm truck, the manure spreader, and the automo- 
bile was cutting down the demand for standard farm wagons. Of 
25 manufacturers reporting to the secretary on this subject, 16 said 
that they were making farm trucks. Many of them admitted that 
there was very little, if any, profit in this trade. The secretary 
reported that 36 concerns outside of the association, 20 of which 
were not wagon manufacturers, were making such trucks, and that 
they were combined with boxes from outside manufacturers and 
sold as complete wagons at lower prices than the regular farm 
wagon. The rapidly increasing business of the International Har- 
vester Co., which was held to be due to the exceedingly long terms 
granted by that company, also caused much anxiety. A similar 
source of uneasiness was the very large cash discount given by the 
Moline Plow Co. on the Mandt wagon, which was rapidly increasing 
the wagon business of that concern. 

In spite of these conditions, in October, 1908, the secretary was 
able to report that there was little price cutting in or out of the 
organization. He said: 

The answers to Ques. 5 as to continued maintenance of prices 
need no comments, for after twelve months of dull trade and 
poor business it shows a wonderful strength of purpose and a 
most intelligent comprehension of the actual conditions of 
trade * * *. At several of the fall meetings of industrial 
associations like our own, a very strong effort has been exerted 
to have their members realize that manufacturing will be con- 
ducted under greater rather than less expense than in the past, 
and any idea of selling the product at lower prices is not to be 
thought of. 

At a meeting of the association in December, 1908, the conditions 
of the trade were fully considered, and at the conclusion of the dis- 
cussion the following resolutions were unanimously adopted: 

That this association recommends an advance of 10 per cent 
over present selling prices. 



38 



FAKM-MACHINBRY TBADE ASSOCIATIONS. 



WHOLESALE PRICE ACTIVITIES. 



a9 



That no orders be taken after May 1, 1909, without this 10 
per cent advance being applied. ^ .oAn 

That no orders be taken between this date and May 1, 190^, 
for shipment later than May 1, 1909, except at 10 per cent ad- 
vance over present selling prices. 

That it is recommended that each member send out notice to 
his selling forces, including traveling salesmen, jobbers, and 
dealers, of this proposed advance, and that such notice be mailed 
by or before December 20, 1908, and that a copy of such notice 
will be mailed immediately to the secretary. 
The reasons given by the association for this advance may be sum- 
marized as follows : Greater increase in costs than in prices in the 
past;^ decrease in profit per wagon during recent years of large 
trade ; decreased rate per wagon not sufficient to pay fair profits on 
large investment still necessary under the decreased demand ; in- 
creased investment because of increased prices of material with the 
certainty of further increase ; failures of manufacturers under exist- 
ing conditions; poorer representation in the retail trade because of 
decreased retail profits; ability of the farmer to pay a fair price, 
and expectation that the advance would not decrease demand.' 

Shortly after this meeting the secretary reported that he had 
received notices of the proposed advance from 38 of the 39 members. 
He reported that two large outside concerns also intended to put the 
advance into effect, but that they hesitated to confer with repre- 
sentatives of the wagon association, largely because of the fear that 
it might have the appearance of collusion and be so advertised. It 
was estimated that the proposed advance would yield to members 
an additional profit of approximately $1,500,000. Shortly before 
the time for the advance to become effective, the secretary reported 
that no member of the association had notified him that they would 
not put the advance into effect, and at a meetmg of 29 members held 
April 28, 1909, all of them announced their intention of makmg the 
fuU advance of 10 per cent. It was also arranged that invoices for 
shipments after May 1, when the proposed advance was to go into 
effect, should show on their face whether the order had been taken 
before or after May 1. This precaution was evidently taken to pre- 
vent any of the members from takmg orders at the old prices after 
the date fixed for the advance. Furthermore, the association 
adopted a resolution reaffirming the action taken in December, 1908, 
making the advance apply on wagons, parts of wagons, and extras 

in all territories. 
It was claimed at this time that the 39 members of the wagon asso- 
• ciation made three-fifths of the total output of farm wagons. A 
committee had been app ointed to call upon the International Har- 

lA compilation of retunis from members purported to show that from 1897 to 1907 
costs bad advanced 42 per cent and prices 30 per cent. ia « 97<L 

. Tbe full text of the letter setting forth these reasons U shown in Exhibit 14. p. 270. 



f 



H 






vester Co., the Studebaker Brothers' Manufacturing Co., and other 
large outside concerns to learn their attitude toward the advance. 
Delay in putting the advance into effect on the part of some of the 
outside concerns caused some apprehension, but a little later it was 
reported that the International Harvester Co. had advanced their 
prices 5 per cent, and it was announced that this advance of only 5 
per cent had been made in several other instances. It was found 
that the members of the association had not met with much success 
in booking orders at the 10 per cent advance, and that the advance 
of only 5 per cent made by outside factories had made it imprac- 
ticable for the members of the association to demand more. Accord- 
ingly, the executive committee of the association voted in July, 1909, 
to recommend " to the membership of this association that all orders 
taken from and after the date of this meeting be at an advance of not 
less than 5 per cent over prices in effect April 30, 1909." ^ 

There was a tacit understanding entered into at this meeting 
that the " members of the committee who had voted for the passage 
of any important recommendation, especially those related to in- 
creased costs, would notify the secretary in every case where they 
contemplated changing the general policy in carrying out such rec- 
ommendations, and that the secretary should have discretionary 
power to notify the other members of the committee or the associa- 
tion as he might deem best." 

In commenting on the results, the secretary in November, 1909, 

said : 

We stand on the threshold of 1910 with our prices 5 per cent 

higher than in 1908 as a general thing, and in some cases 10 per 

cent higher. 
In February, 1910, the secretary of the association sent out a com- 
pilation of wagon prices in certain specified territories for the infor- 
mation of members. These prices were those made to carload, cash 
buyers, f. o. b. factory, with all freight equalizations and allowances 
of every kind deducted. A somewhat similar list had previously 
been sent out by the southeastern department of the association (see 
p. 29) to its members, who were cautioned to note that the prices 
shown were not regular selling prices of the different concerns repre- 

iThe following comment was made by the secretary when sending this resolution of 

the executive committee : 

As to the certainty of maintaining the five per cent advance there can be no 
Question for right along our outside competitors have realized the necessity of it 
and most of them have put on that amount, also the indications that we will have 
a laree croo and good prices insure it. Let us therefore not be disappointed in not 
bringing down everything we shot at, for if what we have accomplished during 
the past six trying months is considered, we have made great gain : 

First. Prevented the lowering of 1908 prices. ,^ .. ,. ^, 

Second. Stimulated some trade early in the year that would not have come ordi- 
narily, and it has kept us moving. ^ , ^ , .. * ^, #.«.««„«» 

Third Made a five per cent advance absolutely sure by standing for ten per 
cent till our competitors who might have made none committed themselves to five 

Fourth. Advanced prices and conditions for a better trade basis in 1910. 



40 



FARM-MACHINERY TRADE ASSOCIATIONS. 



sented. In January, 1010, the members of the southeastern depart- 
ment reaffirmed the recommendation made by the association in 
December, 1908, as to the necessity of an advance of 10 per cent in 

prices. 

The members of the National Wagon Manufacturers' Association 
held a meeting in May, 1910, at which it was shown that an advance 
in selling prices made in 1909 approximating 6 per cent was being 
maintained by all. In October the secretary reported : 

The recommendation passed at last meeting as to the main- 
tenance of prices then existing has been generally kept, and m 
some few cases higher prices have been obtained, while lower 
prices have been made in a few special cases. 

The matter of a uniform net price list for extras or common repair 
parts was taken up by the secretary in the early part of 1908. He had 
been instructed to prepare such a list and was authorized to determine 
the amount of profit that should be added over shop costs and over- 
head expenses. The difficulties in preparing this list are suggested 
in a bulletin sent out by the secretary shortly afterwards. In this 
bulletin he gave the average cost for two members who " look well to 
their costs," and also the highest and lowest prices to dealers and to 
jobbers, reported by the manufacturers belonging to the association, 
on various specified parts of a SJ-inch farm wagon. The costs and 
prices given were as follows: 



Extra part. 



Axle, with skeins 

Bolster, wood, no stakes. 

Beach, complete. 

Toogae: 

Drop, complete 

stiff, stick 

ETener.... •••*.•**••••. • 
Neck yoke ■ 



Shop 
cost. 



tl.M 

.86 

3.00 

L18 

.68 

.40 



Price to dealer. 



Low. 



S3. 88 

.86 
.79 

rm 

L43 

.47 
.60 



High. 



K25 
1.89 
1.60 

465 

&49 
1.16 
1.16 



Price to Jobber. 



Low. 



12.75 
.78 
.71 

9L61 

1.35 

.48 

.14 



High. 



13.65 
L70 
1.60 

S.90 

118 

.W 

LOB 



The secretary made the following statement in this connection: 

Comment on the above is unnecessary, as fi^r^ show for 
themselves and also point out the fact that while in some in- 
stances fair returns are being obtained for these parts, in other 
cases these extra Jists apparently have not been revised in many 
years, and with the increase in cost of materials, and workman- 
ship, these parts are netting the factory little, if anything, above 
cost. 
The list prepared by the secretary was submitted by him in Decem- 
ber, 1908, but as several members considered it too high he was 



^ 



WHOLESALE PRICE ACTIVITIES. 



41 



1 ' 



1 ^^^^ 






directed to revise the list and send copies of it to all members as 
the recommendation of the association. 

These instructions to the secretary were apparently carried out in 
1909, and in October, 1910, he was directed to again " furnish a copy 
of the suggested base upon which to complete list of of catalogue 
prices subject to any discount which a member might see fit to make." 

It was understood that the prices of this list should be net prices, 
subject only to a regular cash discount of about 5 per cent. It was 
pointed out that if members desired to use the same discount as 
quoted on wagons it would be necessary only to increase the amounts 
to the extent that when discounted they would bring the same net 
results. It was suggested that the members' old price lists of extras, 
made when wood materials were low in price, needed revision not 
only to " correct " the margin of profit but also to prevent loss. The 
later revision of the list in 1912 by a committee of the farm-wagon 
department of the National Implement & Vehicle Association is 
referred to elsewhere. (See p. 50; also Exhibit 16.) 

Since 1911 the farm-wagon department of the association has con- 
tinued the work of the National Wagon Manufacturers' Association. 
Various phases of its activities are referred to on pages 47-M. 

Section 3. Activities of the National Plow Association. 

Before the National Plow Association was first organized, in April, 
1907, some understanding had apparently been reached by the various 
plow manufacturers in regard to the classification of common types 
of walking plows.* At any rate, immediately following the organi- 
zation of that association, the members proceeded to adopt a schedule 
of list prices for steel walking plows and lever harrows, with speci- 
fied differential charges for variations from the scheduled types. 
This list was subject to the discount of individual members. For 
certain other classes of plows and tillage implements no uniform list 
price was recommended, owing to great variations in equipment and 
weight. 

Standard equipment for disc harrows and cultivators was adopted, 
a standard equipment committee was created, and the secretary was 
directed to investigate the list prices of different members on com- 
mon parts of various implements. Members who found it necessary 
to make an irregular price on any implement on which the association 
had recommended a list price were expected to notify the secretary. 
In April, 1909, it was announced that, with only minor exceptions, all 
members of the association had adopted the recommendations made 
by the standard equipment committee, and that most of the members 

iThlB may hare been the result of the work of the earlier association, known as the 
** Northwestern Plow ABSOclation/' whose records have not been available for exami- 
nation. 



42 



]>ABM-MACHIN£BY TBADS ASSOCUTIONa 



WHOLESALE PRICE ACTIVITIES. 



43 



had adopted the new list prices recommended by the association for 
extra plowshares for the trade in 1909. It was decided that members 
should use their influence with their branch-house ipresentatives to 
induce them to adhere to the recommendations of the standard equip- 
ment committee. It was also decided that when imy member, because 
of competition, found it necessary to furnish equipment different 
from the standard equipment recommended he should report the fact 
to the secretary for investigation and report to the association. 

At a meeting of the National Plow Association in October, 1900, 
the secretary made a report on the advantages of list prices for all 
implements and the objections thereto. This report read, in part, as 
follows : 

OBJECTIONS. 

First. List prices not practicable on account of difference in 
construction, weight, and cost. ,,,.,,.. i, 

My answer is that take for illustration a 16" high-lift sulky 
plow. It is used for the same purpose and all niembers having 
adopted the same equipment, I believe uniform list prices could 
be established based on the highest or average member's cost. 
The same condition applies to harrows, cultivators, etc. 

Some may say that all walking plows of the same style and 
size cost the same, but I have records in my office of several 
members' costs on a plow in which their cost of material varies 
68 cents, and their cost of productive labor varies 56 cents. The 
total cost of material and labor is $5.52 ; hence, if there is a differ- 
ence in the members' factory costs on a walking plow sellmg at 
the same list price of 20 per cent, I hardly believe there could 
be a greater difference in any other implements. 

Second. Uniform list prices would tend to furnish competitors 
with more information regarding net selling costs, which possibly 
would result in cutting prices. ^ , , . 

My answer is that each and every member would control his 
discounts the same as the present on walking plows and lever har- 
rows. If one member had an advantage over another m the con- 
struction and cost of any certain implement on which list prices 
were based on the highest cost, it would enable him to give a 
larger trade discount, but it would not be necessary to make ^e 
same trade discount nor the same cash discount on all goods. He 
could make his discount 40 per cent on plows, 45 per cent on 
. harrows, 50 per cent on cultivators, etc. 

ADVANTAGES. ' 

First. It would better enable you to make a profit on special 
styles or sizes of harrows, cultivators, and planters, which are 
usually made in small quantities, as goods made in small quan- 
tities can not be manufactured as cheaply as those made in larger 
quantities. By adopting list prices you provide agamst such 
conditions, the same as has been done on three and four section 
lever harrowa 



# 



> 






As you are aware, up to two years ago, it was customary to sell 
all sizes of lever harrows at a net price per section and usually 
based on the cost of a two-section size, which secures the adoption 
of the list prices you have and will receive about the same ratio 
of profit on the three and four section sizes as on the similar sizes. 

Second. A factor of great importance is that from present 
indications, your next purchases of raw materials will cost more 
than your last and that you will be obliged to increase your 
selling prices if you intend to have the same ratio of profit. 
In view of the proposed advance in your selling prices, it seems 
like an opportune time to adopt list prices and with list prices 
once established, it would simplify the modifying of selling 
prices by only changing the discounts to accommodate any 
changed conditions in cost. 

Third. It would benefit the majority of the retail dealers if 
the manufacturers' list prices would be the basis for their selling 

prices. 

Fourth. The list prices would represent a great saving of 
time in checking up the contracts as received ; also minimize the 
number of errors which always necessitates considerable corre- 
spondence. . 

We have not trespassed upon any of the National or State 
antitrust laws by attempting to regulate production or to regu- 
late the net selling prices of implements, and by establishing 
uniform list prices, it would not in any way regulate the net 
selling prices. 

I believe this subject to be of great importance and that it can 
be made very profitable, but there may be some objections which 
I do not know about, hence I hope all members present will dis- 
cuss this subject freely; also decide to call a special meeting for 
the purpose of recommending or establishing uniform list prices. 

All members present except three favored considering the subject. 
The president was requested to appoint a committee of three to meet 
with the secretary to consider this subject and report their recom- 
mendations at the next meeting. 

The records of the association do not show that any further action 
was taken in this matter. 

In April, 1910, it was reported that all members of the plow asso- 
ciation were complying with the various recommendations on stand- 
ard equipment, that had been made by the association. Later in 'the 
year some of the wholesale houses at Dallas, Tex., were reported to 
be furnishing certain parts as regular equipment which the associa- 
tion had recommended should be considered as extras. The plow 
association instructed its secretary to visit Dallas and, if the equip- 
ment recommended by the association did not meet the approval of 
the wholesalers, to endeavor to reach an agreement on some equip- 
ment satisfactory to all. 

Through the efforts of the association, the Oliver Chilled Plow 
Works, one of the largest plow manufacturers in the United States, 



44 



FABM-MACHINERY TRADE ASSOCIATIONS. 



and one which did not belong to the association, was induced in 1910 
to adopt the list prices of the association on wood and steel beam 
steel plows, and also to advance the list price of wood-beam chilled 
plows to the price of steel-beam chilled plows, the price of some of 
the latter also being advanced. 

That this advance in list prices was expected to effect an advance 
in net prices is indicated by the comment by the secretary of the asso- 
ciation in reporting this matter to its members in November, 1910. 
In this connection he said : 

* ♦ ♦ While all of these changes represent a large profit to 
the Oliver Co., they also represent a profit to all other chilled 
plow manufacturers * * *. 
In the latter part of 1907 the National Association of Agricultural 
Implement & Vehicle Manufacturers inaugurated a movement to 
bring about shorter terms for the various lines of farm machmery. 
The terms for plow goods and tillage implements were referred to the 
National Plow Association. That association took up the mattei 
with considerable energy, and in January, 1908, a resolution was 
adopted directing the secretary to notify each member to instruct 
his branch-house manager or agent at each trade center to meet at 
once with similar representatives of other companies to consider and 
recommend shorter terms of payment for 1909. Meetings of this 
sort appear to have been held by the jobbers' clubs at Kansas City 
and Omaha, and attempts were made to interest the clubs at Minne- 
apolis and Dallas. It was conceded that it was not convenient for 
all manufacturers to adopt the same terms. 

The president of the association pointed out m April, 1908, that 
changes in terms could not be effected by concerted action, but would 
have to be worked out gradually. He expressed his own views that 
each member should make shorter terms. . . t ioaq 

All members present at a meeting of the association m June, 1»U», 
expressed their approval of certain terms that were discussed, but the 
minutes of the meeting state that the terms and cash discount ap- 
proved were not in any way to regulate or have any bearing on the 

net selling prices. ,, , ... ir ^ 

In March, 1909, a resolution was adopted by the association callmg 
upon its members to use their best efforts to improve the system of 
note settlement and to discourage the practice of carrymg plow goods 
or extending dealers' accounts from fall to spring terms. At the 
annual meeting of the association shortly afterwards it was an- 
nounced that the discount dates had generally been shortened from 
one to three months. 

At the annual meeting of the association in April, 1910, the secre- 
tary read the terms of payment recommended by the association for 
that year and stated that, on reviewing the terms in force by some of 



WHOLESALE PMCE ACTIVITIES. 



45 



t 



■*'i 



# I €t 






V^l 



the large jobbers in Omaha, Kansas City, St. Louis, and Indianapolis 
territories, he had found that they compared very favorably with the 
terms of the plow association; that in some cases the maturity date 
was one month later, or the cash discount date one month earlier. 
It was recommended that the members continue the 1910 terms for 
trade in 1911 and that any member might be privileged to make 
shorter terms. 

Even more strongly perhaps than in the case of the members of the 
National Wagon Manufacturers' Association the members of the 
National Plow Association seem to have been impressed with the fact 
that to secure harmonious prices among competing manufacturers a 
uniform system of cost accounting is quite as necessary as standard 
specifications and standard equipment. Accordingly, a cost commit- 
tee was appointed by the plow association to prepare a uniform ac- 
counting system. Its report made in 1908 was a detailed explanation 
of every possible item that it was considered necessary to include in 
the computation in order to determine actual costs of goods. These 
items covered not only the cost f. o. b. factory, but also the cost of 
making sales to jobbers and to dealers, respectively, as well as cost of 
freight to delivery points, when the freight was paid by the manufac- 
turers. The report was urgent in directing special attention to the 
fact that ample allowances should be made to cover waste and losses 
of materials and workmanship; that no item of unproductive labor, 
maintenance of plant, depreciation, donations, claims for breakage or 
defective goods, or even exchange on customers' checks should be 
overlooked. Furthermore, members were advised to include interest 
on their investment. The inclusion of this item was deemed to be so 
important that the cost committee made a supplemental report on the 
subject in April, 1909. This recommended that an interest charge of 
5 per cent on the capital, surplus, and undivided profits be included 
by each company as a part of the cost, and that the amount of inter- 
est paid on borrowed capital be added thereto. The original report 
of the committee had already been printed in pamphlet form and sent 
to members for their use in considering the committee's recommenda- 
tions. The supplemental report, which had been approved by mem- 
bers at the second annual meeting, in April, 1909, also appears to 
have been sent to them in printed form. Members were not required 
however, to adopt the cost system recommended. In the annual re- 
port of the secretary in April, 1909, it was stated that several mem- 
bers had asserted that this cost system alone was worth all their 
expenses on account of the association. 

After the National Plow Association became a part of the National 
Implement & Vehicle Association, in 1911, the work of the former 
association was continued by the plow and tillage-implement depart- 
ment of the latter, as shown elsewhere. (See pp. 47-54.) 



46 



FARM-MACHINEBY TRADE ASSOCIATIONS. 



Section 4. Activities of the National Implement & Vehicle Atiociatioii 
and its special trade departments. 

National Implement & Vehicle Association.— Notwithstanding 
efforts that had been made by the wagon and plow associations, and 
also by the National Association of Agricultural Implement & 
Vehicle Manufacturers/ to make their members realize the ad- 
vantage of an accurate knowledge of their own costs, it was alleged, 
after the National Implement & Vehicle Association was formed, 
that the trade in these lines and in others was still affected by un- 
intelligent price competition arising from a lack of such knowledge. 

To assist members in all branches of the industry in installing a 
uniform method of cost accounting, and to supplement the activities 
of its special trade departments in their efforts to promote harmony 
of prices by securing the adoption of standard specifications and 
eiiuipment, the National Implement & Vehicle Association main- 
tains a committee on manufacturing costs (formerly known as com- 
mittee on costs). At the annual meeting of the association in Octo- 
ber, 1911, the report of this committee attributed a high proportion 
of the failures in business to a lack of knowledge of costs. The 
report pointed out that, in many cases, prices were not fixed upon 
costs, but upon prices fixed by competitors, regardless of possible 
wide disparity in construction or values. This, it was asserted, led 
to price cutting, mutual loss, and the furtherance of disastrous com- 
petition. Keference was made to the fact that, although in some 
cases printed pamphlets showing methods of figuring costs had been 
distributed, yet the prices that were still being made on certain 
machines was evidence of the fact that the principles advocated in 
these pamphlets had not been put into general practice. The con- 
cluding paragraph of the report read as follows : 

There is no incentive to cut prices on goods already sold too 
low, if the manufacturer is familiar with the facts, and the last 
word of the committee is — ^get in touch with your cost. 

iThe National Association of Agiicnltural Implement k Vehicle Manufacturers had 
provided for the appointment of a committee on costs at least as early as 1905, for at 
the annual meeting of the association in that year a committee on costs 'made a report 
to the members, calling attention to the failure of many of the members to maintain an 
adequate system of cost accounting and suggesting a cost formula of general applicftion, 
which was recommended to members for their adoption. The association ordered this 
report to be printed. At the annua) meeting of the association in November, 1910, how- 
ever, the chairman of the committee expressed some doubt as to the usefulness of such 
a committee in the work of the association (which covered various branches of the in- 
dustry). He reported that a letter had been addressed to the 200 active members of the 
association, to which 58 replies had been received. This letter aslied whether the member 
addressed had a satisfactory cost system and whether he would be willing to change if a 
satisfactory uniform system could be devised. The replies were such that the chairman 
asserted that it would be useless to attempt anything along the line of a uniform cost 
system for the members of the association, since results would not be commensurate with 
the work involved in such an undertaking. He also stated that he agreed that a cost 
eonunittee had no standing or place in an organization like the National Association of 
Agricultural Implement & Vehicle Manufacturers, and he recommended the dlscontlna- 
ance of the committee, or that the committee be continued only in an advisory capacltj. 



WHOLESALE PRICE ACTIVITIES. 



47 



]r 



% 



*f 



The obvious motive behind these cost-educational efforts was to 

advance prices. 

This recommendation of the cost committee was followed in De- 
cember, 1911, by a request to that committee from the executive com- 
mittee of the association to formulate a list of cost items, essential 
in making up complete costs, to be printed and distributed to the 
members of the association. The list thus prepared was a revision 
of the cost system which had been adopted by the plow association 
a few years earlier (see p. 45), and is shown in full as Exhibit 29 
on page 323 of this report. In submitting the revised list at the 
annual meeting of the association in October, 1912, the committee 
said: 

This plan was devised by a committee of the National Plow 
Association of which your present conmiittee was a part. It 
has been used with much success. 

While this system was applied to tillage implements, yet its 
fundamentals apply to all lines and with the necessary adjust- 
ment of details to meet conditions should be of assistance to 
many. It is entirely unnecessary for your committee to present 
further argument as to the necessity of using a cost system in 
modern business, but we would urge that your present system 
be tested on the essential points brought out in the foregoing. 

Departments of the National Implement & Vehicle Associa- 
tion. — Since the early part of 1911, the special trade departments of 
the National Implement & Vehicle Association have continued the 
work of standardization and the discussion of costs and prices, for- 
merly conducted by predecessor associations. 

The National Association of Grain Drill Manufacturers, which 
became the grain-drill and seeder department of the National Imple- 
ment & Vehicle Association, had apparently made less progress along 
the line of standardization than either the farm-wagon or the plow 
association. In May, 1913, however, the grain-drill department took 
up the matter of standardizing the equipment for certain grain 
drills, especially to determine what parts of the equipment should be 
considered as extras. A proposal to eliminate a number of unneces- 
sary sizes of grain drills and special equipment was favorably re- 
ceived. At another meeting of the grain-drill department in June, 
1913, the conclusion was reached that close attention should be given 
to costs of production and that increasing costs demanded a readjust- 
ment of selling prices. 

At the first meeting of the plow and tillage-implement department 
of the association, in May, 1911, the standard equipment which had 
been adopted by the National Plow Association was approved and 
the seci'etary was instructed to notify all manufacturers. In con- 
sidering the subject of standard equipment, the question of furnish- 



48 



FABM-MACHINEBY TRADE ASSOCIATIONa 



ing hard oilers with disc harrows was brought up, and the consensus 
of opinion was that, if furnished, they should be charged for as an 
extra. The secretary was instructed to see the International Har- 
vester Co. in regard to this, and also with regard to furnishing 
doubletrees and neck yokes, and automatic markers with com 
planters, and to report to the department thereon. It was ordered 
that copies of the cost sheets of one factory for wood-bar harrows, 
which had been checked by several members and found to correspond 
approximately with their own, be sent to all makers of wood-bar 
harrows. The question of equipment for listers was raised, and the 
secretary was instructed to write one concern which was imderstood 
to be furnishing extra plates in excess of the standard equipment. 
The secretary was also directed to take up the matter of standardiza- 
tion for plow-beam- billets with several steel companies. Further- 
more, the executive committee was instructed to prepare and furnish 
all members with cost sheets, bringing costs up to date, on plows, 
harrows, cultivators, and corn planters. 

At another meeting of the plow and tillage-implement department, 
in May, 1912, the matter of standard equipment was discussed at 
some length. It was voted that hard oilers be considered as part of 
the standard equipment for disc harrows at the discretion of the 
manufacturers. It was thought that advances in the cost of mate- 
rials, and the prospect of further advances, emphasized the necessity 
of at least maintaining the existing prices of implements. A com- 
plaint was read from one of the members relative to the sale of 6 and 
8 shovel cultivators in Indiana and Michigan. It was the sense of 
the members that the difference between 6 and 8 shovel cultivators' 
heavy extension gangs, as shown by the actual cost, should be at 
least $1, and the difference between 6 and 8 shovel light gangs, such 
as the Eagle claws or curved beams, should be 50 cents, and that this 
recommendation should be included in the standard equipment rec- 
ommendations. 

Each member present at a meeting of the plow department, held in 
April, 1913, expressed himself regarding conditions in the material 
markets and in the trade for the ensuing year. It was voted that 
manufacturing conditions required that contracts for materials 
should be made to cover a period of 12 months ending July 1 of any 
year. The prices of individual commodities were considered item by 
item, and the conclusion was reached that there was a general 
tendency for prices to increase, which was thought to indicate the 
probable necessity for reviewing the figures of manufacturing costs. 
Another meeting was held a month later (May, 1913), at which the 
steel situation was discussed. The members seem to have thought 
that, in view of the circumstances then surrounding the implement 
business, they deserved greater consideration from the steel pro- 



>- 



WHOLESALE PBICE ACTIVITIES. 



49 






m 



ducers in the matter of prices. The opinion was expressed that some 
advance in implements would be necessary to cover increased costs, 
but it was thought that this should be measured conservatively if 
volume of trade were to be maintained. The matter of prices for 
implements for 1913-14 was also discussed, one member taking the 
position that the conditions surrounding each business differed suffi- 
ciently to make it unsafe to follow a competitor, either as to prices 
or terms, without an accurate knowledge of one's own situation. It 
was stated that to improve the situation it was necessary for the 
manufacturers to act, and that if all were to act simultaneously all 
necessary changes would be made without disturbance to the trade, 
Y' and the results would be exceedingly gratifying. 

At a meeting of the farm-wagon manufacturers held April 20, 
1911, at which the farm-wagon department of the National Imple- 
ment & Vehicle Association was organized, a general discussion took 
place, revealing a practically unanimous belief in the necessity for 
the maintenance of existing prices, although it was claimed that 
higher prices were justified by manufacturing costs and expenses. 
The discussion of costs was postponed until a later meeting, at which 
fuller information would be* available concerning work along cost 
lines then being carried on at the factories of members. The next 
meeting of this department, of which there is any record, took place 
June 5, 1912. There were present representatives of 11 concerns, 
which it was claimed represented 75 per cent of the farm-wagon out- 
put of the United States. It was unanimously agreed that prices 
ought to be higher and that none of those present would take orders 
at the existing prices after December 31, 1912. In September, 1912, 
a compilation of replies to certain questions relative to conditions 
in the farm-wagon business was read and discussed. This showed 
that 17 out of 23 companies had made no general change in selling 
prices during 1910, 1911, and 1912. Twenty expressed the opinion 
that prices ought to be higher. After discussion it was voted to rec- 
ommend that after January 1, 1913, wagons should not be furnished 
at less than a 5 per cent advance over the existing prices, and that no 
orders for shipment after April 1, 1913, should be taken except at a 
further advance of at least 5 per cent. At the next meeting, in 
November, 1912, this resolution was reaffirmed, but the date (April 
1) was changed to June 1. 

The members of the wagon department also decided to take care 
of the alleged increase in costs by greater economies in manufacture, 
especially to eliminate certain sizes of wagons, in order to curtail 
expense incident to variety in detail of manufacture. (See p. 52.) 
In June, 1912, the matter of eliminating certain wheel heights and 
substituting lower ones was discussed, the secretary being instructed 

08248*— 15 i 



•>-* 



50 



FABM-MACHINEBY TRADE ASSOCIATIONS. 



to ascertain the views of the members. The problem of standard- 
izing wide tires was also taken up at this time, A letter was sent 
out to all members of the department, manufacturers and dis- 
tributors as well, asking whether they would agree on certain speci- 
fied widths for wide ims. The returns showed 23 favorable replies 
and 2 adverse ones. A committee was appointed to canvass the 
matter further, apparently to look into State laws relative to wide 
tires, with the object of establishing standard sizes. In the mean- 
time the net price list for tires, which had been issued in August, 
1904, and recommended to the members of the National Wagon 
Manufacturers' Association for adoption in 1907, was again reissued 
by the farm-wagon department of the National Implement & 
Vehicle Association in May, 1911. (Sec Exhibit 15, p. 271.) The 
prices recommended in this list were intended for use as net prices 
in connection with price lists issued by the several manufacturers. 
They were based on tires for standard wheels with no reduction on 

wheels of less height. 

In June, 1912, the wagon department appointed a committee to 
recommend the proper basis for a uniform gross list for extra and 
repair parts for farm wagons. The committee, consisting of the 
representatives of some of the principal manufacturers, confined its 
labors to the size of wagons commonly used throughout the Middle 
West, the consensus of opinicMi being that a high list should be 
adopted giving the dealer a " good big profit." In November the 
committee presented its report to the wagon department of the asso- 
ciation (see Exhibit 16, p. 272), showing not only the gross lists 
of six leading companies with the discount of each, but also a gross 
list recommended for adoption by the members, which it was pointed 
out, if discounted 50 per cent, wotdd result in net prices that would 
show a fair margin. The committee was careful to state, however, 
that it did not recommend a discount of 50 per cent, or any other 
discount, but did suggest the adoption of the gross list, each manu- 
facturer to determine the proper discount to apply after investi- 
gating his own costs in the regular way. It also recommended a 
similar list for mountain-wagon parts by adding 30 to 40 per cent 
to the list recommended, which would enable the quoting of a uni- 
form trade discount applicable to both lists. Shortly afterwards one 
of the leading factories belonging to the farm- wagon department, in 
sending out to its branch houses new lists based upon that recom- 
mended by the wagon department, announced a discount of 50 per 
cent to dealers and stated that the principal competing manufacturers 
had agreed to adopt a list that would net them 50 per cent of the list 

prices. 

Impressed with the necessity of having an accurate knowledge of 

the difference between the amounts of money paid out and the 



t\ 



t^- 



WHOLESALE PRICE ACTIVITIES. 



51 



t 



^\ 



$■1' 



h ! 



( 



amounts taken in, for determining whether business was conducted 
at a profit or at a loss, the president of the farm- wagon department, 
who is the head of a prosperous factory, and who has been active 
in the association work for years, prepared a detailed cost formula 
in 1913, which was asserted to be especially adapted to the need of 
the farm- wagon industry. The items of general and selling expense 
in this formula were intended to be similar to the deductions from 
gross income made by manufacturing corporations in making re- 
turns of net annual income to the United States Internal Revenue 
Bureau under the Federal corporation-tax law. The only item for 
interest shown to be included in this formula as a cost of the busi- 
ness was that paid on bonds or other indebtedness to an amount not 
exceeding the amount of paid-up capital stock outstanding at the 
close of the year. Allowance for repairs to buildings and equip- 
ment, and for guaranty or warranty expenses, were specifically in- 
cluded in the factory expense. The costs reported for materials 
included freight, probably an allowance for losses and waste, and 
perhaps an interest charge for carrying stock. It is not unlikely 
that similar allowances for lost and wasted time were also included 
in costs of productive labor, although they were not shown in detail. 
Charities and contributions, cash discounts, shortage expense and 
allowances, general expense not otherwise classified, bad debts and 
losses, and depreciation on buildings and equipment were reckoned 
as part of the expenses. 

When this formula was submitted to the members of the farm- 
wagon department, in June, 1913, it aroused considerable interest. 
The method of handling certain costs created some discussion, spe- 
cial attention being apparently directed to what would be the most 
logical method of charging interest on investment in materials. 

In presenting this formula the president of the wagon department 
pointed out that " the very great benefit in having associations make 
comparisons is in seeing how the costs vary in the different plants 
and what the averages of the comparative cost are. In this way the 
figures of one plant are a check on the figures of the other." The 
"paramount importance" of similar or common specifications for 
comparing the costs at different factories was also explained. 

For purposes of comparison, members of the department pre- 
sented the costs of their concerns based upon a wagon of the size 
in most general use. In reporting the result of this comparison the 
minutes of the department state that the figures showed a wide dis- 
crepancy, indicating that cost methods of all members were not uni- 
form, and that there was need of such imiformity as had been pro- 
posed by the president of the department. It was the prevailing 
opinion that useful facts could not be obtained until a proper basis 
of comparison was arrived at. It was suggested that a firm of cost 



^1 



52 



FABM-MACHINEBY TBADE ASSOCIATIONS. 



accountants be employed to visit various plants to take the specifi- 
cations of a few standard wagons and check up costs on those wagons 
from the systems in use, according to the formula offered by the 
president. Accordingly, it was voted that the president of the de- 
partment enter into an arrangement of this sort, the compilation 
to be presented at a meeting of the farm-wagon department, and 
the cost to be borne by the department. 

The report of the accountants on the cost of standard wagons at 
the factories of five of the largest manufacturers was made at a 
meeting of the department held in September, 1913. The minutes 
of this meeting state that the information proved to be interesting 
and valuable, especially in view of the statement that the costs were 
built up in the same manner from the same basis at every plant. It 
was asserted that the figures were undoubtedly a surprise to many, 
in that they showed an advance over figures previously submitted. 
It was held that this fact constituted a very forcible suggestion to 
every manufacturer that the most important step to take before 
maldng up his selling prices for 1914 was to very carefully check 
over his costs on the basis of this report. 

At this meeting considerable attention was given to the situation 
with respect to a standard 1-horse wagon shipped into the southern 
and southeastern sections of the United States. It was stated that 
the difference between the prevailing selling prices in that territory 
for wagons made largely by local manufacturers and the actual costs 
to those shipping into that section was so small as to emphasize 
strongly the need of giving these conditions special attention. 

In further commenting upon the report of the accountants, the 
minutes of the department made the following statement : 

It seemed to be the consensus of opinion that while in making 
up future selling prices these increased costs could not be ab- 
sorbed out of profits, yet would have to be taken care of either 
by additions to present selling prices or economies in manufac- 
ture that would offset it. The latter course seemed to be more 
generally favored, but could hardly be accomplished except 
through standardization and elimination, for the costs of pro- 
ducing wagons under present conditions and present trade 
demands would admit of little economy, yet if several sizes of 
wagons really unnecessary at this time could be eliminated and 
certain parts of wagons brought to a common standard much 
economy would result, for every size of wagon duplicates the 
large variety of detail in manufacture. 

During 1914 members of the grain-drill, farm-wagon, and plow 
and tOlage implement departments of the National Implement & 
Vehicle Association made some progress in plans for standardizing 
the factory products of their members, especially in the direction of 
reducing the variety of sizes and types and retaining certain sizes and 



^\ 



^ 



m 



,,.1^ 

« 



/ 



WHOLESALE PRICE ACTIVITIES. 



53 



^ 



' 



types as standard. At the annual meeting of the National Implement 
& Vehicle Association in October, 1914, its committee on manufactur- 
ing costs strongly urged the standardization of cost accounting. In 
this connection the committee pointed out that — 

with the adoption of a standard system of cost accounting, the 
comparisons of costs among the members of an association not 
only become an easy matter, but is one that will imdoubtedly 
bring most profitable results. * * * 

In order to bring about such results among the members of the 
association the committee recommended the establishment of a cost- 
accounting bureau in charge of a competent man acting under the 
direction of the executive committee through the secretary. The 
committee expressed its opinion of the functions of such a bureau as 
follows : 

1st. To perfect cost systems applicable to the various lines, 
with a set of blanks to be used in compiling cost figures, in such 
a way that all reports from any given industry would be upon a 
uniform basis. 

2d. To have submitted to it, from time to time, tabulations of 
costs on certain standard productions by the members of the 
association, for the purpose of making comparisons and averages, 
with a view of proving the correctness of the cost figures, and 
where the costs submitted by some member seem out of line, to 
go into the details with such member and endeavor to correct the 
apparent inaccuracy. 

3d. To cooperate with those members who have no cost systems 
in establishing this important feature in their organizations. 

The desirability of installing a bureau or department in charge of 
an expert to handle both manufacturing and selling costs, including 
the information on cost accoimting furnished to retail dealers, had 
already been referred to by the president of the National Implement 
& Vehicle Association in his opening address at the first session of 
this convention of the association. In referring to the matter he 
pointed out that this work was being seriously handicapped by not 
having some one to devote his whole time to it. 

On the subject of price discussions or the formation of price lists 
by the association the secretary in a recent letter to the Bureau of 
Corporations called attention to an excerpt from the minutes of a 
meeting of the executive committee held June 3, 1914. This excerpt 
reads as follows: 

One of the members of the committee stated that any discussion 
concerning prices would in his judgment be clearly contrary to 
existing laws, and that if it was ever considered to be* within the 
function of this or any other committee in the association to dis- 
cuss or act upon that subject, he would be compelled to withdraw. 
The committee unanimously concurred that discussion or action 
on prices was entirely contrary to the purposes of the organiza- 
tion and would not be permitted. The point was raised not 



64 FARM-MACHINERY TRADE ASS0CUTI0N8. 

because of any actions previously taken, or proposed for the 
future, but because it was deemed wise to have a complete under- 
standing on the subject. It was brought out, however, that our 
attorneys had advised that under certain conditions it was legal 
to formulate uniform ^gross price lists, but it was the unanimous 
conclusion of the comfmittee that no discussions or any action on 
same now or in the future would be permitted. 

In considering matters of standardization, it was decided that 
no consideration be given or reference made to the charging extra 
for nonstandard equipment. 

4 * 

Section 6. Sigmfieanoe of cost system in relation to selling prices. 

That the cost-accounting movement with its supplementary activi- 
ties in respect to standard specifications, equipment, etc., has been 
adopted by the members of the National Implement & Vehicle As- 
sociation as a means of establishing a higher price level and as a 
method by which to establish an approximate standard of prices 
for competing concerns admits of no doubt. The computation of 
cost includes interest, not only on borrowed money but also upon the 
investment, besides every possible item of expense, as well as allow- 
ances for all services rendered. This figure which is denominated 
"cost"* is obviously the equivalent of a profit-yielding price. The 
fundamental idea of cost in cost accounting comprises outlay and 
waste and excludes any element of profit. The question whether a 
price computed in this manner is high or low is quite another matter, 
depending principally upon the rate at which the interest is com- 
puted. 

In the present instance this question has more than an academic 
interest. If the laws of the United States forbid direct regulation 
of prices by competitors among themselves as agreements in restraint 
of trade, it should be determined whether they do not also forbid the 
regulation of prices by indirection, through concerted action of com- 
petitors in adopting a uniform system of cost accounting, in ex- 
changing information in regard to their costs, and through recom- 
mendations to fix prices in accordance with the cost. The adoption 
of common standards of cost and the exchange of information in 
regard thereto is mainly to secure a similar course of action on the 
part of each member. 

While prices of different makers of similar machines under this 
system tend to be approximately the same, yet the fact that the 
prices of each are based upon his own costs, even though compari- 
sons are made, theoretically, at least, contemplates differences in 
prices to correspond to differences in costs. There would be a tend- 
ency toward the elimination of such differences, however, unless 
there were differences in quality corresponding to the differences in 

»Tlie recommendations of the National Implement ft Vehicle Association as contained 
tn Its cost pamphlet state that the inclusion of the Item of Interest Is optional. (See 
Exhibit 29. p. 323.) 



WHOLESALE PRICE ACTIVITIES. 



55 



/ 







cost, in which case the prices would be substantially equalized by 
this method. The principle, however, of such a determination of 
prices through costs is not in harmony with the principle of com- 
petitive prices. It is evident, moreover, that the plan of meeting 
to discuss and compare costs computed on this basis involves the 
possibility of agreements in respect to adoption of prices based upon 
the highest costs reported, or of agreements to add a high, uniform, 
arbitrary rate of profit, or even direct agreements on prices. 

The question to be emphasized here is whether competing manu- 
facturers should be permitted to establish and maintain even ap- 
proximately uniform prices by concerted action in comparing costs ; 
and whether such proceedings are free from the dangers and objec- 
tions incident to more direct methods of fixing uniform prices among 
competitors. 

Apart from this aspect of price regulation, it may be a proper 
function of trade associations to assist members to adopt a proper 
system of cost accounting that shall accurately measure amounts 
actually expended for or chargeable to production. The adoption 
of standard specifications, recommended by associations, is often of 
advantage to both manufacturers and purchasers and tends to pro- 
mote economies in industry and commerce. Frequently, however, the 
purpose in establishing standard or uniform equipment is to deprive 
the purchaser of some convenience that he has formerly received 
without any corresponding reduction in price. The meeting of com- 
petitors to compare and discuss costs as a basis for prices is, how- 
ever, as already stated, peculiarly susceptible of being used as a cloak 
for conferences to make agreements on prices. 

Section 6. Activities of the National Association of Thresher Mannfac- 

turers. 

So far as shown by the records now available, the thresher manu- 
facturers' association paid less attention than the wagon manufac- 
turers to costs and standard specifications as a basis for determining 
prices, nor did they, like the plow manufacturers, adopt a schedule of 
gross prices. 

In 1904, however, a committee of the thresher manufacturers' asso- 
ciation, which had taken up and compared manufacturing and selling 
costs of the various sizes and kinds of threshing machinery, reported 
a schedule of net "amounts" below which, in the opinion of the 
committee, threshing machines could not be manufactured and put 
upon the market except at a loss. Twenty-four sizes of separators 
were listed and 14 sizes of tractor engines, while " amounts " were 
also shown for weighers and baggers, self-feeders, horse powers, at- 
tached swinging stackers, steel tanks, etc. Details of the method 
used in determining these amounts were not explained. This sched- 
ule of net " amounts " suggested in 1904 was readopted at the annual 



i 



56 



FABM-MACHINEKY TRADE ASSOCIATIONS. 



meetings in 1908 and again in 1909 and 1910, with slight modifi- 
cations. In 1909 one or two concerns which were reported to have 
engaged in considerable price cutting were asked to reconsider their 

« 

The National Association of Thresher Manufacturers has also 
kept up an agitation against price concessions involved in the prac- 
tice of receiving old machines, in excess of their value, in payment 
for new machinery, and also against concessions made by paymg 
freight charges, which the association believed should be paid by 
customers. It is claimed that this agitation at the association meet- 
ings has been productive of great improvement from the standpomt 
of the members. Thresher manufacturers generally use high list 
prices with high commissions. The association recommends the 
adoption of lower list prices and lower commissions, corresponding 
more nearly with the prices actually received and commissions ac- 
tually paid. It is urged that this would not only result m the 
establishment of more satisfactory relations with dealers, but would 
also bring about greater stability in prices. . ^ x 

The selling price of the pneumatic stacker (which is an important 
part of the threshing outfit) is fixed by the license contracts of the 
different manufacturers with the Indiana Manuf acturmg Co. (bee 
Chap. V.) 






c 



/ 



• 



CHAPTER m. 
EFPOKTS OF MANUFACTUEEES' ASSOCIATIONS TO REDTTCE COSTS. 

Section 1. Introduction. 

Legal and practical limitations upon the activities of associations 
in respect to prices have caused much attention to be given by the 
associations to the possibilities of securing increased profits by 
reducing costs. The efforts of the manufacturers' associations in 
this direction have been mainly to reduce factory costs through the 
adoption of standard specifications for materials; to secure the 
lowest possible freight rates; to reduce the costs of fire insurance; 
to limit credit risks and improve the financial condition of dealer- 
customers ; and to reduce or eliminate various items of expense inci- 
dent to the method of selling goods through retail dealers. The 
federated associations of dealers have also taken an active interest 
in some of these matters, and at times they have cooperated with 
the manufacturers' associations, especially in respect to freight 
charges and the reduction of selling costs. These topics are dis- 
cussed in some detail in succeeding sections of this chapter. 

So far as shown by the available records, the manufacturers' asso- 
ciations have made no systematic effort to regulate one of the princi- 
pal costs of manufacture, namely, wages paid to employees. Little 
or no effort appears to have been made to aid members having differ- 
ences with labor organizations. 

In 1901 the handling of labor difficulties was proposed as a field 
of activity for the National Association of Agricultural Implement 
& Vehicle Manufacturers, but the executive committee decided that 
it could not see its way clear to take up the subject. Plans of strike 
insurance had been discussed, but apparently with the same result. 
The passage of legislation to regulate the hours of labor has been 
opposed as class legislation, and in March, 1911, the members of the 
executive committee of the National Implement & Vehicle Associa- 
tion voted that the association should join the National Council for 
Industrial Defense ^ if it could be done without financial obligation, 



. y -• 



»Thls organization was established by the National Association of Manufacturers, the 
object, as stated by its officers, being to provide " a separate and specific medium througli 
which* constant, watchful attention might be given to the matter of vicious class legisla- 
tion which is ever being urged in the Federal Congress by organized labor." (Page 3841. 
vol. 4, Hearings on Lobby to Influence Legislation, pursuant to S. Res. 92, 63d Cong.. 
let Sess.) gj 



68 



FARM-MACHINERY TRADE ASSOCUTIONS. 



but subsequently affiliation with this organization was left to each 
member to determine for himself. Moreover, the reports of the com- 
mittee on State legislation have at times referred adversely to bills 
introduced in various State legislatures fixing hours of labor, and in 
February, 1912, the members of the association were urged to write 
their Senators and Representatives in Congress in opposition to a bill 
providing for an eight-hour day for work done for the United States, 
in view of the effect its passage would have as a precedent. 

In October, 1912, the report of the committee on national legisla- 
tion also referred to the status of several bills that had been intro- 
duced in Congress in the interest of labor, including the bill provid- 
ing for the eight-hour law, anti-injunction bills, and bills relating to 
trial by jury in contempt cases. It was recommended that members 
give strict attention to such matters and call the attention of the 
committee to any bills of interest to manufacturers in the lines repre- 
sented by the association. 

* The members of the National Implement & Vehicle Association 
have also advocated the passage of legislation to promote vocational 
training — a measure also favored by the National Business League 
of America. (See p. 91.) One phase of the relations between manu- 
facturers and their employees that has received consideration in 
recent years is the matter of industrial indemnity legislation, dis- 
cussed in Chapter IV. 

Section 2. Standardization of materiali. 

National Wagon Manufacturers' Association. — ^Efforts to re- 
duce costs by the adoption of common or standard specifications for 
materials purchased in the rough or in finished form may be said to 
have been systematically be^n in 1904 by the National Wagon Man- 
ufacturers' Association, which had just been reorganized as the re- 
smlt of the report of a committee appointed to devise a plan for the 
improvement of the business. (See p. 28.) It was asserted that sub- 
stantial savings could be effected if uniform specifications could be 
established and the use of materials of special dimensions be discon- 
tinued. The purchase of materials for members was decided to be 
entirely outside the province of the association. The secretary was 
instructed', however, to get in close touch with mills producing various 
kinds of wood stock purchased by wagon manufacturers in the rough 
and to investigate and report what the standard dimensions for such 
stock should be. Furthermore, the association recommended stand- 
ard heights for wheels and standard lengths and widths for tires for 
adoption as soon as the shop conditions at individual factories would 

permit. 

An advance in the price of steel bars caused a meeting of a number 
of implement and vehicle manufacturing concerns to be held in March, 



^4 



\ 

4 



m 



-{ 



REDUCTION OF COSTS. 



59 



1906. At this meeting a committee, composed of representatives of 
some of the largest interests in various branches of the industry, was 
appointed to confer with the steel manufacturers. This resulted in 
an agreement by which the latter made a special price of $1.40 per 
hundred pounds on 150,000 tons of steel bars to the manufacturers of 
implements and vehicles. Later in the year a standing committee on 
materials was appointed by the National Association of Agricultural 
Implement & Vehicle Manufacturers, after a special committee had 
made a report on the cost of iron and steel. 

In the meantime the members of the farm- wagon association were 
confronted with unsatisfactory conditions in securing bent-wood 
stock used for wheel rims, hounds, etc. They felt that prices had 
been arbitrarily advanced to an unwarranted extent. To reach a 
better understanding with producers, a conference was held with rep- 
resentatives of the Vehicle Woodstock Co., a concern which marketed 
the products of a large number of the bending factories. The re- 
sult of the conference was unsatisfactory to the wagon manufactur- 
ers, and in the latter part of 1906 or early in 1907 several members 
of the farm-wagon association formed a mutual company, known as 
the National Wagon Stock Co., to supply their own bent stock. The 
wagon manufacturers' association also made a protest to an associa- 
tion of the spoke manufacturers against existing prices of spokes, 
pointing out that if prices were advanced the wagon makers would 
be forced to produce their own supply of spokes. 

To induce competition among the producers of various kinds of 
wagon wood stock, the members of the wagon-makers' association 
decided to establish a bureau of the association to encourage as many 
mills as possible to take up the cutting of wagon stock. In the early 
part of 1907 several thousand copies of a letter were sent out to mills 
and shippers of hardwoods and wagon-box materials, requesting 
each to return a sheet listing materials for sale, including axles, 
bolsters, reaches, hubs, bottom boards, poles, felloes, bent hounds, 
rims and poles, spokes, eveners, singletrees, neck yokes, plank, and 
box boards. It was planned to send out a similar inquiry monthly, 
the wagon manufacturers being furnished with a compilation of the 
replies in order to aid them in supplying their wants. In order that 
the seller should come in contact only with actual buyers, it was pro- 
posed that the various members of the wagon association should 
advise the secretary of their needs once a month or oftener, so that 
he could direct them where they could be supplied. 

The secretary, in explaining the conditions which had led to the 
establishment of this material bureau, asserted that as a large de- 
mand for wagon stock existed among the wagon manufacturers, with 
the mills, brokers, and lumber associations against them, the only 
way to meet the situation was by the same kind of an organization 



CO 



FABM-MACHINERY TRADE ASSOCIATIONS. 



that bad brought the wagon manufacturers success in the selling field. 
Accordingly, as a help in the work of the material bureau, he pro- 
posed a conference of the buyers of the different companies belonging 
to the wagon association to discuss prices, grades, contracts, etc., and, 
in this connection, he pointed out that a dollar saved in buying stock 
was surer profit than a dollar advance in the price of wagons. Each 
buyer was asked to come to the proposed meeting with a sheet show- 
ing rough and finished dimensions in order to determine what sizes 
should be declared standards, the adoption of which would induce 
mills cutting to such dimensions to accumulate stocks marketable at 
any time from which the wagon manufacturers could draw at will. 
Furthermore, certain specified dimensions were adopted as standard 
for singletrees and neck yokes, common parts in which there was little 
individuality, in the belief that if manufacturers of such parts would 
be induced to turn them out in large quantities the price to the wagon 
manufacturers would be reduced. 

One of the most important results of the conference of wagon 
buyers, held in September, 1907, was a proposal to bring about the 
adoption of certain grading and inspection rules to govern the pur- 
chase of hardwood lumber. As a result of this proposal, grading 
and inspection rules for wagon stock were adopted by agreement with 
the National Hardwood Lumber Association and other hardwood 
lumber associations. In February, 1909, a conference was held be- 
tween committees representing the wagon manufacturers' association 
and the spoke manufacturers' association, at which certain grading 
and inspection rules for white-oak spokes were agreed upon, to be 
submitted to the respective associations for approval. 

In the meantime, to afford the members of the wagon association 
a quick and effective means of getting quotations on materials, the 
secretary issued a pamphlet in June, 1908, containing the names of 
producers of different kinds of wagon-wood stock intended for the 
exclusive use of the members of the wagon association. In Septem- 
ber, 1908, a similar list was issued of the names of the manufacturers 
of various iron and steel parts entering into the construction of farm 
wagons. 

Other methods of reducing the cost of wagon materials proposed 
in 1908 were the substitution of square front-hounds for bent front- 
hounds on all drop-pole 2-horse wagons, as fast as the shop conditions 
of each member would permit, and also an attempt to induce the 
various iron and steel mills to carry stocks of tires provided standard 
lengths were adopted by the wagon manufacturers' association. Mem- 
bers were later urged to conform to this recommendation and also 
to adopt standard heights for bolsters. It was also suggested that 
if the wagon makers could adopt a standard form of oval or round- 
edge tire the iron and steel mills in making their rolls could be 



REDUCTION OF COSTS. 



61 



' 



^ 






..^ -m 



assured that one form would be satisfactory to all wagon manu- 
facturers. 

In a bulletin referring to the work of the material bureau issued 
in the spring of 1909 the secretary claimed that the adoption of 
standard dimensions, of grading and inspection • rules for wagon 
stock, and of grading and inspection rules for oak wagon-spokes, 
which had been brought about by the bureau, were worth all that 
the association work had cost, and he expressed the belief that the 
vahie of the bureau would be better appreciated when stock became 
more difficult to secure as the wagon manufacturers came into the 
market for materials. 

The operations of the material bureau do not appear to have been 
entirely satisfactory to producers, one of whom reported that certain 
other producers had expressed the opinion that the object of the 
bureau was to get material cut to the size desired by the wagon manu- 
facturers, who would offer such prices as they pleased, knowing that 
the material could not be marketed elsewhere. The secretary of the 
wagon association in calling the attention of members to this com- 
munication stated that he had replied that there was no recognized 
market regarding price and that the operations of the bureau did not 
hamper the buying ability of any of the members of the wagon 
association. He pointed out to the members of the association that 
if conferences of the buyers were held he believed that better condi- 
tions would be created in the wagon-stock market, because, if the 
wagon manufacturers could figure on such materials as plow and 
implement makers figured on iron and steel, the interests of the 
wagon manufacturers would not be injured and trade jeopardized 
by the constant fluctuation of prices. 

An improvement in the trade outlook in 1909 caused the members 
of the wagon association to approach the market cautiously to avoid 
forcing the prices of materials upward. It was felt that, since 
the action of traveling buyers sent out by different wagon manufac- 
turers in bidding for material had much to do with general advances 
in prices, it would be of considerable advantage to furnish these buy- 
ers with accurate information as to prevailing prices. The secretary 
had already been instructed to formulate a plan for gathering, tabu- 
lating, and distributing information concerning the prices and market 
conditions of wood materials. He suggested that a meeting of the 
buyers could be held several times a year to devise ways and means 
by which individual manufacturers could be better able to cope with 
various associations and organizations that were being formed among 
the producers of materials. He asserted that there was no reason 
why, through the interchange of information, many dollars of profit 
could not be added by the savings in more intelligent purchasing. 
The matter was thorougly discussed at the annual meeting of the 






fABM-MACHINERY TBADE ASBOCIATIOKa 



associatioii in November, 1909, and the aecretary's suggestions were 
approved. 

The proposed meeting of the buyers was held at Chicago in De- 
cember, 1909. The secretary of the association was directed to gather 
and tabulate information regarding the prices paid by members for 
a few standard sizes of materials, and also the amount of stock on 
hand. A bulletin containing this information was issued to mem- 
bers in February, 1910. Attention was called to the fact that in the 
large majority of cases the prices ranged very close together. The 
secretary expressed the hope that it might be possible to keep the 
prices from taking a wider spread by making a simUar comparison 
at frequent intervals. A short time before a bulletin had been sent 
to the mills and producers of wagon stock relative to the plans of the 
material bureau for 1910, in which it was stated that the competition 
among wagon manufacturers for suitable material was as free and 
open as it had ever been and was likely to continue so, as it was no 
part of the object of the material bureau to establish conditions that 
would enable the wagon manufacturer to secure control over the 
prices of supplies and materials. He pointed out that while the 
wagon manufacturer was benefited by the larger field in which to 
buy materials when stock was cut to standard dimensions, yet there 
had been no overproduction, and stocks had been sold at fair prices, 
although the demand had been li^t He also pointed out that be- 
fore the adoption of standard specifications nearly every factory had 
its own specifications, which restricted the market on stock cut to 
such dimensiona 

An effort was made to enlist the aid of several wagon-manufactur- 
ing companies outside the association in the support of the material 
bureau from whose work they had benefited. In presenting the 
advantages of the bureau to these manufacturers, stress was laid 
upon the advantage that would result if a common or general market 
price for wagon material of standard dimensions could be estab- 
lished, or published in a way that would be generally understood. 
Attention was called to the fact that manufacturers of furniture and 
chairs by standardizing their requirements had been able to establish 
a sort of common value between the mill and the consumer. Several 
of the wagon companies outside the association expressed a willing- 
ness to contribute to the maintenance of the material bureau, but 
some refused to pay as much as requested. 

In the meantime the successful result of the efforts toward stand- 
ardization led to the suggestion that the movement be carried fur- 
ther. Kevised grading and inspection rules for wagon box-boards 
were also recommended for adoption to the National Hardwood Lum- 
ber Association and the Hardwood Manufacturers' Association. An 
agreement in regard to this revision was reached with the National 



X«i|. 



m 



n 






EEDUCTION OF COSTS. 



6a 



Hardwood Lumber Association in June, 1910. Members of the 
wagon association were requested to use these rules in purchases sub- 
sequently made in order to make them effective at once. 

In September, 1910, it was pointed out that every important item 
of wood materials for farm wagons had been standardized except 
hubs and hounds, and the fact that each wagon manufacturer insisted 
upon a special pattern of hub made it difficult for the hub manu- 
facturer to buy his raw materials or accumulate finished stock with- 
out first having orders and specifications on hand. It had been 
suggested that if three different types of hubs could be adopted as 
standard a large variety would be cut out and enable the hub manu- 
facturer to turn out hubs for the open market, which it was thought 
was the only thing that would make competition in that line. Fur- 
thermore, the secretary was directed to notify all interested in the 
California trade that bolsters of 42 inches should be considered as 
standard and the manufacture of bolsters of 44 inches should be 
discontinued. 

At about this time the secretary reported that 22 of the 27 members 
of the association had either abandoned the use of bent- wood front 
hounds as recommended by the association (see p. 60) or were in 
process of doing so. He expressed the belief that the influence of the 
majority would undoubtedly accomplish the completion of the 
change. 

In the latter part of 1910 the secretary of the wagon association 
pointed out that manufacturers felt that, in being obliged to pay 
prices which were the same as Pittsburgh prices, plus Pittsburgh 
freight rates, on steel bars shipped from points hundred of miles 
nearer the purchaser, they were paying an arbitrary tax in addition 
to prices which already included at least a fair manufacturing profit. 
He suggested that if all the consumers were of like mind there were 
several ways in which a readjustment of basing points could be ef- 
fected. The matter was discussed by the members of the National 
Wagon Manufacturers' Association and by the executive committee 
of the National Association of Agricultural Implement & Vehicle 
Manufacturers, but the records do not show that any definite action 
was taken beyond the adoption of resolutions recommending that 
individual members use their influence to eliminate the additional 
freight charge, and that the materials committee of the National 
Association of Agricultural Implement & Vehicle Manufacturers 
urge the steel manufacturers to base steel prices upon Chicago, Gary, 
and other points, as well as Pittsburgh. 

National Plow Assoclation. — During the four years of its exist- 
ence, from April, 1907, to December, 1910, the National Plow Associa- 
tion did not attempt to maintain a material bureau like that of the 
wagon manufacturers' association. No attempt appears to have 



4 






FABM'MACHINEBT TRADE ASSOCIATIONS 



been made to bring the plow manufacturers and the producers of 
materials used by them into communication, but some efforts were 
made to encourage the former to adopt standard specifications for 
certain common parts. (See Exhibit 18, p. 282.) Soon after the 
plow association was organized an investigation by the secretary had 
disclosed the fact that the mills were rolling about 40 different sections 
of plow beams, and from 100 to 125 different sizes. It was pointed 
out that if the number of sections could be reduced to four or five, 
and if several of the principal steel mills could be induced to equip 
themselves to turn out these standard sections, it would place the 
plow makers in much better position than to be tied up with one or 
two mills who had rolls for special sections. 

Another inquiry showed that 33 different patterns of neck yokes 
were in use among the members, many of whom purchased finished 
neck yokes. The secretary suggested that if this number could be 
reduced the mills could carry a stock of rough and finished patterns, 
probably resulting in lower costs and selling prices. Early in 1909 
a standard neck yoke was adopted for sulky and gang plows, and also 
for walking, riding, and disk cultivators and listing plows. It was 
agreed that all members should adopt the patterns recommended as 
early as possible. 

Instructions were also given to the secretary to take up the ques- 
tion of standardizing certain other common parts, such as poles, 
singletrees, steel seats, harrow tee&, etc. The work of standard- 
ization did not progress as rapidly as expected. In urging members 
to cooperate in the movement the secretary declared that, even if the 
saving in a single piece was small, the saving to one member on a 
year's consumption of harrow teeth alone would more than pay his 
dues in the association. 

In the latter part of 1910 the secretary issued a bulletin to mem- 
bers, asking their views on the subject of grading and inspection 
rules for yellow-pine pole stock. The replies showed that, while 
all members required the same quality of material, no two specifica- 
tions were alike. It was the consensus of opinion among the mem- 
bers that uniform grading and inspection rules were much needed 
and would benefit both the producers and consumers, and, after 
discussing the matter, it was finally concluded to refer the matter 
to the National Association of Agricultural Implement & Vehicle 
Manufacturers, as much of this class of material was used by a 
large class of manufacturers not members of the plow association, 
who were members of the National Association of Agricultural Im-. 
plement & Vehicle Manufacturers. Nothing further seems to have 
been done along this line until the matter was taken up by the plow 
and tillage-implement department of the National Implement S^ 
Vehicle Association in May, 1912. (See p. 66*) 



4X 



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K% 



I 

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P 



BBDTJOTION OF COSTS. 



65 



National Implement & Vehicle Association. — The material 
bureau, which had been established by the National Wagon Manu- 
facturers' Association, was continued along similar lines by the 
National Implement & Vehicle Association. It was decided, how- 
ever, to confine its activities for a time to gathering information 
relative only to wood materials, including hard and softwood lum- 
ber and dimension stock. It was thought that if the work of the 
bureau proved satisfactory in regard to wood materials its activities 
could be extended to other lines if desired. The matter of price 
was left to the mill and customer. As a part of the work of the 
bureau it was also decided to continue efforts of the wagon and plow 
association to aid members in disposing of surplus materials or 
machinery that had accumulated from various causes. From time 
to time members are requested to list such material as they may have 
for sale or which they may desire. A compilation is made from 
these lists and sent to all members. 

The executive committee of the National Implement & Vehicle 
Association abolished the standing committee on materials, but the 
discussion of matters pertaining to the cost of materials continued 
to engage the attention of the members of the special trade depart- 
ments of the association. 

At a meeting of the farm- wagon department in April, 1911, ma- 
terials was one of the subjects discussed. One member called atten- 
tion to the fact that the existing price for bois d'arc^ felloes was 
resulting in a loss to every manufacturer, and that it was apparent 
from investigations made that the supply of this material was ap- 
proaching exhaustion. At this meeting attention was called to the 
closing of the business of the National Wagon Stock Co.. of Little 
Hock, Ark. (see p. 59), whose plant had, it was claimed, been the 
means of protecting the wagon manufacturers of the United States 
against exorbitant and organized advances in the prices of bent rims 
and other wagon material for the four preceding years, and it was 
stated that a proposition was being considered whereby a company 
at Little Rock was to take over the machinery and equipment of the 
National Wagon Stock Co. and continue the manufacture of bent 
rims provided they could be assured of the patronage of the wagon 
manufacturers. A resolution was adopted pledging the support of 
the wagon manufacturers present at the meeting, the prices to be 
adjusted by a committee of the wagon makers. In November, 1912, 

* Under ^ate of Aug. 16, 1911, the secretary of the National Implement & Vehicle Asso- 
ciation issued a bulletin stating that a report of the Forest Service of the United States 
Department of Agriculture on the subject of bois d'arc or osage orange had been pub- 
lished under the direction and at the expense of the farm- wagon department of the Na- 
tional Implement & Vehicle Association, and that a copy would be mailed to each member 
within a few days. 



68248"— 15- 



66 



YABM-MACHIKEBY TBABB ASSOOUHOKS. 



however, it was decided to sell the property of the National Wagon 
Stock Co. 

A meeting of the buyers of four of the principal companies* manu- 
facturing farm wagons was held in November, 1913, to consider the 
possibility of improvement in methods of buying. The record of 
this meeting states that no definite action was taken, but it was 
decided that each of those present should study ways and means and 
report suggestions at the next conference that should be held. 

At a meeting of the plow department of the National Implement 
& Vehicle Association in May, 1911, the secretary was instructed 
to take up the matter of standardization of plow-beam billets with 
several steel companies and report. In May, 1912, the members of 
the plow department, in considering a suggestion of the Yellow Pine 
Manufacturers' Association that the adoption of grading and in- 
spection rules for yellow-pine pole stock might be of mutual interest, 
directed the secretary to ascertain the views of the members of the 
plow department upon this matter. The results of the secretary's 
investigations are not shown in the records of the association. 

In the early part of 1913 the plow department held a meeting at 
which special consideration was given to the material situation with 
reference to its probable effect on selling prices. It was thought that 
contracts for materials should cover a period of 12 months ending 
July 1 each year. At a meeting in May it was shown that the market 
price of steel remained unchanged and that the producers were ap- 
parently determined to maintain prices regardless of the circum- 
stances surrounding the plow and tillage-implement business, which 
the plow manufacturers believed deserved consideration in order 
that their volume of business and that of the producers should not 
be affected adversely. It developed that comparatively few of the 
manufacturers had bought and that a number of the largest of them 
were not inclined to buy under existing conditions. This situation 
was evidently a reason for a suggestion of the secretary of the asso- 
ciation to the executive committee of the association, which was as 
follows : 

We believe also that this association represents such a large 
consumption of common materials, i. e., iron and steel, that by 
properly directed cooperation much benefit might be obtained in 
correcting some of the conditions under which we contract and 
are supplied. 

The desirability of creating a standing committee or department 
of purchasing agents of concerns belonging to the National Imple- 
ment & Vehicle Association was brought up in November, 1913, but 
it was thought that the matter should be referred to the executive 

* These companies were the John Deere Wagon Co., the International Harvester Co., tlw 
Studebaker Corporation, and tbe Mandt Wagon Co. (Moline Plow Co.) 



«^ 



EEDUCTION OF COSTS. 



67 



^. 



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•* 



41 



^ 



i^\ 







committee of the association for consideration. No record is avail- 
able to show that any steps have been taken to establish such a 
department. 

Section 3. Charges for transportation. 

The manufacturers' associations have been active in promoting 
the interests of their members in respect to freight rates and rules 
governing the transportation of goods. In these matters they have 
often received considerable assistance from the dealers' associations. 
When the National Association of Agricultural Implement & Ve- 
hicle Manufacturers was organized, in 1894, it was proposed that the 
executive committee should look after the matter of railroad freights 
and transportation charges. A committee on freight and classi- 
fication, to work in the interest of members in respect to anything 
affecting the cost of freight transportation, was one of the first stand- 
ing committees to be created. It was recognized that the combined 
influence of the members would accomplish much more effect in nego- 
tiating with the railroads than could be accomplished by the indi- 
vidual manufacturers. 

One of the first matters taken up was to petition Congress for the 
passage of a law requiring railroads to adopt a uniform freight 
classification throughout the United States. Negotiations with the 
Western Classification Committee in the latter part of 1894 resulted 
in an agreement that the latter would not make certain proposed ad- 
vances. In November, 1896, however, the freight committee reported 
that an unsuccessful effort had been made to get the Western Classi- 
fication Committee to make reductions in certain articles that had 
recently been advanced by changes in classification. The committee 
pointed out that there was still recourse to specific or commodity 
rates. 

From this time on, similar efforts continued to be made by the 
National Association of Agricultural Implement & Vehicle Manu- 
facturers and the National Wagon Manufacturers' Association to 
induce the various railroad classification committees to take action 
favorable to the implement and vehicle manufacturers, or to refrain 
from putting into effect rates or rules that threatened to affect the 
manufacturers adversely, such as changes in rates, classifications, 
and rules governing minimum carload weights, car demurrage, rates 
on mixed shipments in carload lots and on damaged goods returned 
for repairs. Efforts were made for the freight committees of the 
two associations to cooperate more closely with each other, especially 
after 1901, when the members of the National Association of Agri- 
cultural Implement & Vehicle Manufacturers decided to employ a 
permanent secretary experienced in traffic matters. 



fi 







68 



FARM-MACHINEBY TRADE ASSOCIATIONS. 



After the National Plow Association was organized, in 1907, a 
freight transportation committee was created, but this committee 
does not appear to have been especially active, due probably to the 
fact that many of the members of the plow association also belonged 
to the National Association of Agricultural Implement & Vehicle 
Manufacturers. 

In July, 1908, the chairman of the committee on freight and trans- 
portation of the National Association of Agricultural Implement & 
Vehicle Manufacturers was instructed to file complaint with the In- 
terstate Commerce Commission, protesting against proposed general 
advances in rates. He was authorized to join or cooperate with any 
organization represented for that purpose. The records of the asso- 
ciation do not show that any action was taken along this line until 
May, 1910, when a conference of shippers of different commodities, 
at which the National Association of Agricultural Implement & Ve- 
hicle Manufacturers was represented, was held at Chicago, and a com- 
mittee appointed to address a letter to each of the presidents of east- 
ern railroad lines suggesting that the matter of an advance in rates 
be referred to the Interstate Commerce Commission. A meeting of 
the various shipping interests to be held at Omaha was called to 
consider proposed advances in rates in western trunk-line territory. 

Subsequently a truce was arranged whereby the railroads agreed to 
withdraw temporarily the proposed increases pending adjudication jy 
the Interstate Commerce Commission. The shippers' committee rep- 
resenting various commercial interests, appointed a special committee 
of 12 members, including the secretary of the National Association 
of Agricultural Implepaent & Vehicle Manufacturers and the freight 
traffic manager of the International Harvester Co., to go to Washing- 
ton to represent the interests of the shippers. Hearings were held 
by the Interstate Commerce Commission. Prior to one of these hear- 
ings held at Chicago, the members of the subcommittee of the ship- 
pers' committee had preliminary meetings and invited the coopera- 
tion and interest of every shipper. The National Association of 
Agricultural Implement & Vehicle Manufacturers was active in its 
support of this committee, furnishing money and the assistance of its 
officers. Finally, in February, 1911, members of the National Im- 
plement & Vehicle Association were notified by the secretary that the 
Interstate Commerce Commission had decided these cases, known as 
the Eastern and Western freight cases, against the carriers. It was 
pointed out that during the fight the association had applied its ener- 
gies to problems confronting the implement and vehicle lines, although 
irooperating with shippers of other commodities in the main issue. 

In the meantime members of the National Association of Agricul- 
tural Implement & Vehicle Manufacturers were notified that the secre- 
tary would assist them in procuring refunds of high charges that had 



^-J 



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A 



BEDUCTION OF COSTS. 



69 



been made. The matter of establishing a bureau in the secretary's 
office to handle freight claims for members was considered, and the 
latter was instructed to write all members having no regularly or- 
ganized traffic department to ascertain whether he could render as- 
sistance in respect to claims arising in transportation matters. There 
was also considerable cooperation in respect to freight matters be- 
tween the National Federation of Eetail Implement & Vehicle Deal- 
ers' Associations and the National Association of Agricultural Im- 
plement & Vehicle Manufacturers. In 1909 it was reported that these 
two organizations were working together for an improved bill of 
lading. 

When the National Implement & Vehicle Association was organ- 
ized, in 1911, the former secretary of the National Association of 
Agricultural Implement & Vehicle Manufacturers was employed as 
freight traffic manager to devote his entire time to the traffic work 
of the association, continuing the activities of the National Associa- 
tion of Agricultural Implement & Vehicle Manufacturers in this 
respect. It had become customary for the earlier association to issue 
bulletins and circular letters from time to time, advising members 
not only of proposed traffic changes but also of other matters affect- 
ing the cost of transportation. This practice was continued by the 
National Implement & Vehicle Association. One of the first bulle- 
tins issued by the freight traffic manager of this association related to 
a proposed change in the rules of the western trunk lines governing 
the storage of implements in transit. Soon afterwards members of 
the association were requested to express their views on a bill to 
regulate express companies, which had been introduced in the Illi- 
nois Legislature. These are merely illustrative of various topics 
mentioned in the bulletins and circular letters of this department of 
the association. 

At the annual convention held at Chicago in October, 1911, a com- 
prehensive report by the freight traffic manager, who was also chair- 
man of the freight transportation committee of the association, 
called attention to various phases of the transportation problem and 
the manner in which the work of the department was conducted in 
looking after the interests of members. It called special attention 
to the facilities enjoyed by the association for securing information 
regarding important traffic changes and to the importance of audit- 
ing freight bills, and in this connection stated that during the period 
from January 1, 1911, to October 11, 1911, the department had ad- 
justed overcharge and loss and damage claims for members aggre- 
grating about $9,700. 

Later the secretary of the association was instructed to urge the 
freight traffic department to endeavor to interest each member in some 



i» 



TO 



FABM-MACHINEBY TRADE ASSOCIATIONa 



phase of the work of that department, and it was reported that at that 
time about 60 per cent of the members were actively cooperating. 

The annual report of the freight traffic department, at the con- 
vention held in October, 1912, called attention to changes in the 
various railroad classifications during the preceding year. An 
interesting feature of the department's work was shown in its report 
of negotiations with the Southern Classification Committee. The 
report stated that the latter committee issued a revised classification 
embodying a large number of drastic changes to become effective 
June 17, 1912. After analysis by the freight traffic department of 
the National Implement & Vehicle Association, the committee was 
notified that the proposed changes were not acceptable to the mem- 
bers of the association, and it was the intention of the association to 
ask the Interstate Commerce Commission for a suspension of the 
changes pending an inquiry as to their reasonableness. The commit- 
tee immediately notified the association that it did not desire a con- 
test over the matter and that they would gladly meet representatives 
of the association in conference to discuss the various objectionable 
items. Several conferences were held, and as a result the committee 
promised to withdraw the objectionable changes. 

The report also stated that the work of the department had greatly 
increased and that members were depending upon it more and more for 
assistance in handling their minor difficulties and still more largely in 
resisting arbitrary action on the part of the carriers in large issues, 
such as classifications and tariffs, where indi\4dual resistance or 
effort would avail but little. The report gave members certain 
specific advice to assist them in their transactions with carriers. 

As to the value of a cooperative association in freight matters, the 
report said: 

The appeals taken to the Interstate Commerce Commission, 
the many times we have appeared before State and interstate 
railroad bodies and our constant conferences with them is suf- 
icient evidence of what it is possible to do for a cooperative 
organization along these lines. The value of our representing a 
large number of shippers of any one commodity can not be over- 
estimated, for today the Interstate Commerce Commission, State 
commissions and the railroads themselves are regarding the 
wishes and claims of the majority of shippers rather than indi- 
viduals or shippers having a large volume of business. In fact, 
there is a strong leaning, and very properly too, in endeavoring 
to determine what will be the greatest good to the greatest num- 
ber; therefore, I say that this work of our association needs no 
further justification than showing that it has now and will con- 
tinue to have an increasing beneficial effect in bringing about a 
greater measure of square deal between carrier and shipper as 
time goes on. 



n' 






¥ 



BBDUCTION OF COSTS. 



71 



At the close of the convention the association adopted the following 
resolution : 

Whereas, there are no problems confronting the manufacturer 
of greater importance today than those of freight transportation, 

Be it resolved, That special attention be given all of the recom- 
mendations submitted in the report of the freight transportation 
committee. 

Another resolution adopted read as follows: 

Whereas, sufficient and efficient transportation is necessary to 
the prosperity of the whole country. 

Therefore, he it resolved, That we favor such laws and regula- 
tions as will give transportation companies sufficient earnings to 
meet all necessary cost of maintenance and operation and to 
provide all facilities required by the growth of communities, and. 

Be it further resolved, That we favor cooperation between the 
transportation companies, producers and snippers' associations 
to promote such results. 

At the annual convention of the association in October, 1913, the 
freight traffic manager of the National Implement & Vehicle Asso- 
ciation reported that during the 11 months preceding his depart- 
ment had received over 23,000 freight bills for auditing, of which 
between 10,000 and 11,000 were for $8 (the minimum amount checked 
by the department) or more. Overcharges, amounting to $1,578.07, 
were discovered. Claims to the amount of nearly $12,000 had been 
adjusted during the year ended October 1, 1913. He also stated that 
during the preceding 11 months 41 bulletins, giving information 
relative to all important changes in traffic matters affecting members, 
had been issued. He called attention to the rulings of the Interstate 
Commerce Commission on changes that had been proposed in the 
Western Classification, and also to other matters of freight classifi- 
cation in which the members of the association were interested. He 
asserted that the association in cooperation with others had been 
able to prevent the cancellation of half rates applying on returned 
shipments in Minnesota, North and South Dakota, Illinois, Iowa, 
Kansas, Nebraska, and two or three other States. In addition, he 
advocated that hearings before classification committees should be 
held at points accessible to shippers and, furthermore, that the mak- 
ing of rates should not be done behind closed doors, or at the dicta- 
tion or suggestion of any faction or set of shippers. The report also 
specified various matters regarding shipments, etc., to which members 
were advised to give their attention. The report concluded by urging 
the support and cooperation of members in the work of the freight 
traffic department, and stated that the aim of that department was to 
assist the traffic manager of each member. 

In October, 1911, the traffic manager of the National Implement & 
Vehicle Association explained to delegates to the dealers' Federation 



•♦ y "^ 



4 



72 



FABM-MACHINERY TRADE ASSOCIATIONa 



BEDUCTION OF COSTS. 



73 



that the Western Classification Committee had voted to eliminate 
binder twine from carload shipments of implements and to raise the 
minimum carload weight to between 24,000 and 30,000 pounds, de- 
pending upon the length of the car. The Federation adopted a reso- 
lution condemning the proposed changes as an unjustifiable attempt 
on the part of the railroads to increase their revenue, also asserting 
that such a change would be disastrous to small dealers, compelling 
them to overload or pay local freight on practically all their goods, 
resulting in increased cost to the farmer. 

In January, 1912, the freight traffic manager advised members of 
the National Implement & Vehicle Association in regard to the 
changes proposed by the Western Classification Committee. Among 
the changes specified was that taking binder twine out of the agricul- 
tural-implement classification and placing it under the head of cord- 
age. Accordingly, the association filed a petition with the Interstate 
Commerce Commission, asking for the suspension of items objection- 
able to members of the association. A hearing was held before the 
suspension board of the Interstate Commerce Commission, at which 
the National Implement & Vehicle Association was represented by 
about 50 persons, including members of its freight transportation 
committee, its attorneys, representatives of companies belonging to 
the association, representatives of the dealers' National Federation 
and constituent organizations, and witnesses drawn from outside. 
In a bulletin to members the secretary stated that the outcome of 
the matter was most important, for, if made effective, the increased 
freights, expenses, and inconveniences would amoimt to many hun- 
dreds of thousands of dollars, and there was hardly a member of 
the National Implement & Vehicle Association that would not be 
affected if the privilege of mixing implements should be disturbed. 

The Interstate Commerce Commission extended the date on which 
the new classification should become effective, and, in April, 1912, the 
secretary, attorney, and traffic manager of the National Implement & 
Vehicle Association, and the secretary of the dealers' National Fed- 
eration attended a hearing on the new classification held by the 
Interstate Commerce Commission in Washington. Early in Janu- 
ary, 1913, announcement was made that the Interstate Commerce 
Commission had rendered its decision in the case, supporting many 
of the claims of the association and holding that the railroads must" 
grant the mixing privilege, but consenting to the placing of binder 
twine in the cordage classification. The secretary of the National 
Implement & Vehicle Association, in commenting upon this decision 
in a general letter to members, characterized it as a victory for that 
association. In this letter he said, in part : 

In fact, while this controversy was pending, both the Official 
and Southern Classification Committees realizing that such 



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changes could not be made arbitrarily, have used more pacific 
means, and by consultation with manufacturers and organiza- 
tions representing certain lines, differences have been equalized 
rendering the suspension of either the Official or Southern Clas- 
sifications unnecessary, and has led the Commission to suggest 
that hereafter in proposing classification changes the shippers 
be given timely notice and afforded an opportunity to attend a 
fair and impartial hearing in order that these adjustments may 
be amicably made, if possible. 

This contest with the carriers over Western Classification #51 
has cost money and time, requiring no less than five hearings, but 
by the presentation of a united front and the constant coopera- 
tion of our members the effort represents, we believe, the best 
organized resistance the carriers have met with, and has thor- 
oughly convinced them and impressed the Commission that not 
only was there merit in our contentions, but that we were deter- 
mined justice should be done. It is improbable that we shall 
again have to go into a similar contest; in fact, we are constantly 
securing adjustments and changes through conferences with the 
carriers that heretofore would have been difficult, if not im- 
possible. 

The Bulletin of the dealers' Federation, in commenting on this joint 
victory of the manufacturers and dealers, quoted a transportation 
man who had attended all the hearings, as follows : 

You implement men got about everything you were after, but 
some others did not fare so well. Your being so well organized 
accounts for it. 

A general advance of 5 per cent in rates proposed by the eastern 
railroads was called to the attention of the members of the National 
Implement & Vehicle Association in a bulletin issued in October, 
1913, and members were asked to express their opinion as to whether 
or not the association should oppose the advance proposed. Shortly 
afterwards members of the association were notified that it was felt 
that the association should protest this advance in rates until it was 
demonstrated as necessary and just, not overlooking the fact that 
the markets of the members of the National Implement & Vehicle 
Association were now open to the world and that manufacturers in 
Canada would invade the trade as rapidly as possible, their progress 
being determined to a large extent by the freight rates. No record is 
available to show what further steps were taken in this matter by the 
National Implement & Vehicle Association.^ 

» The dealers' associations have also devoted considerable attention to -the matter of 
freight transportation charges. Some of these activities have been undertalcen in co- 
operation with the manufacturers' associations, as already shown. One of the most 
important phases of this work that dealers have attempted has been the installation of 
facilities by which the freight bills of its members might be audited and overcharges 
refunded to their members. In March, 1910, the secretary of the National Federation 
pointed out that dealers were losing i good deal of money each year from this cause. He 
suggested that a freight auditing bureau might be established. No active steps to install 
such a bureau appear to have been taken until March, 1912, when it was announced that 
the Western association had engaged an auditor and that the work of auditing freight 



u 



FARM-MACHIKEBY TRADE ASSOOIATIONS. 



Seetion 4. Fire insunuice. 

At a meeting of the National Wagon Manufacturers' Association 
in 1880 the question of the feasibility of a mutual insurance com- 
pany was discussed but apparently without result. The subject does 
not appear to have been brought up again imtil 1906, when the secre- 
tary of the wagon association issued a bulletin calling attention to 
the organization of the Implement & Vehicle Manufacturers' Fire 
Insurance Co. under the guidance of a special committee of the Na- 
tional Association of Agricultural Implement & Vehicle Manufac- 
turers. At the annual meeting of the latter association in Septem- 
ber, 1905, the executive committee had been empowered to organize 
a mutual fire insurance association on lines approved by the com- 
mittee, and soon after the convention of the National Association of 
Agricultural Implement & Vehicle Manufacturers in 1906 the in- 
corporators of the Implement & Vehicle Manufacturers' Mutual 
Insurance Co. met at Indianapolis and completed the organization 
of the company as an enterprise distinct from the association largely 
to avoid the necessity of accepting undesirable risks from members 
who otherwise might feel entitled to special consideration on account 
of their membership in the association. The new company became 
affiliated with the National Association of Factory Mutual Insurance 
Companies. Later, at a meeting of the executive committee of the 
National Association of Agricultural Implement & Vehicle Manufac- 
turers, in November, 1908, a recommendation of the association that 
a committee confer with the National Fire Protective Association to 
evolve and standardize all implement factories was referred to the 
committee on insurance. The records do not show whether the pro- 
posed conference was held, but, in February, 1909, the secretary of 
the association in following instructions of the insurance committee 
requested members to furnish certain statistics which, when tabu- 
lated, might be used to secure a reduction in the insurance rates. 

Early in 1911 the Implement & Vehicle Manufacturers' Mutual 
Fire Insurance Co. of Indianapolis reinsured its risks and went out 
of business. At the annual convention of the National Implement & 
Vehicle Association in October of that year the committee on fire 
insurance pointed out that the real basic principle for discussion of 
fire insurance was fire prevention, and members were advised to 
"fight the risk and not the rate." Soon afterwards the secretary 

bills was JQst getting under wmy. Other State associations were quick to take similar 
action, and at the annual meeting of the National Federation in October, 1913. it was 
reported that f relight auditing bureaus had been established for 11 of the constituent 
assoelations, and that their aggregate cash collections to that time had amounted to over 
110,000. It was stated that this tangible benefit had enabled these associations to in- 
crease their membership very materially. A committee of the Federation was appointed 
to consider the practicability of concentrating the freight auditing service in the hands 
of the Federation. 



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BEDUOTION OF COSTS. 



76 



of the association issued a bulletin calling attention to the saving in 
the cost of insurance that could be effected if members would equip 
their factories with sprinklers and other fire-preventing devices. In 
this connection, he advised members that there were a number of con- 
cerns which made a business of equipping plants with these safety 
devices, furnishing all necessary funds and taking as their remunera- 
tion the saving effected in the cost of insurance. 

In the simmier of 1912 the National Implement & Vehicle Associa- 
tion started a movement to determine the interest of members in the 
establishment of an insurance department in the association. After 
investigation, the insurance committee of the association decided 
that a more practical plan would be to engage the services of a large 
and responsible firm of insurance brokers, and, in February, 1913, an 
agreement was entered into with one of these concerns whereby the 
latter agreed to cooperate with the members of the association in all 
matters pertaining to the various classes of insurance and to make 
inspections of all plants when desired. Members were requested to 
correspond with these brokers and give all information requested 
without reservation. At the annual meeting of the implement manu- 
facturers in the latter part of 1913 it was announced that these ar- 
rangements had already effected savings amounting to some thousands 
of dollars, the saving to some members being in excess of their annual 
dues in the association. It was also announced that this particular 
feature of the association's activity had resulted in securing the mem- 
bership of two large concerns with which the secretary had been 
negotiating. The insurance committee pointed out that it should not 
be forgotten that the association could help its members, not only in 
fire-insurance matters but also in respect to floater, liability, and 
boiler insurance. The members of the association were addressed by 
an insurance expert on the subject of fire protection and the expert 
inspection of risks and policies. He emphasized the desirability of 
fire prevention and explained that the savings in premiums in three 
to seven years would cover the cost of installing automatic sprinklers 
and other devices to prevent fire. He pointed out that the matter of 
inspections was often of more interest than the insurance rate.* 

^ Dealers have also been interested in plans to reduce the cost of fire insurance to their 
members. A movement to furnish dealers with fire protection at lower costs than paid 
to regular Insurance companies led to the adoption of a plan of reciprocal insurance in 
1897 by the members of the Western Retail Implement & Vehicle Dealers' Association, 
composed of dealers in Kansas and Missouri. An organization known as the Reciprocal 
Underwriters was formed, following a plan that had been adopted by the lumber dealers' 
association of Missouri and Kansas. The Reciprocal Underwriters adopted the estab- 
Ushed rate made by the old-line insurance companies, refunding at the end of each fiscal 
year that part of the premiums that had not been paid out for losses or expenses. 

Other dealers' associations began to take an interest in the subject of mutual insur- 
ance, largely because of its importance as a means of increasing membership. Mutual 
insurance associations were formed by members of the dealers' associations in Iowa, Min- 
nesota, and other States. In 1905 an arrangement was proposed whereby the privilege 



16 



f ABM-MACHINERY TKADE ASSOCUTlONS. 



Section 5. limiting credit riiki. 

Many implement dealers lack business experience, and the trans- 
actions between manufacturers and wholesalers, on the one hand, and 
dealers, on the other, are conducted largely upon a credit basis (see 
p. 7), so that it is desirable for the manufacturers, in order to guard 
against loss, to exercise care in determining the extent to which credit 
may be safely extended to a prospective dealer-agent ; to retain some 
sort of security for goods shipped, in case of insolvency or fraud on 
the part of the dealer; and, further, to assist in any movement 
intended to improve the business standing of dealers generally. 

Cooperation in judging CREorrs. — The investigation of the credit 
standing of prospective dealer-customers has for the most part been 
left by the manufacturers' associations to the individual members. 
A credit system or plan that had been adopted by the southeastern 
department of the National Wagon Manufacturers' Association, in 
reporting to each factory undesirable dealers or those who engaged 
in questionable practices, was discussed and approved by the execu- 
tive committee of the wagon association in 1906. The executive com- 
mittee of the National Association of Agricultural Implement & 
Vehicle Manufacturers advised all members of that association to 
join the National Association of Credit Men. A handbook of infor- 
mation on various phases of the subject of credits, consisting of 
articles contributed by members of the credit committee, was pre- 
pared. In 1907 and 1908 members of the National Plow Association 
discussed the merits of a certain hardware credit-reporting agency, 
but no definite action appears to have been taken beyond referring 
the matter to the executive committee of the association. 

The installation of a bureau for the exchange of credit informa- 
tion was an innovation proposed to be taken up by the National 
Implement & Vehicle Association. This plan, it was thought, would 
afford members an opportunity to get reliable information from the 
actual experience of the dealers' creditors, as shown by the ledger 
transcripts of the latter — something that could not be secured 
through the channels then in use. During 1911 the secretary and 
general manager of the association spent much time investigating 

of becoming subscribers to the Reciprocal Underwriters was extended to the members of 
all the constituent associations of the National Federation of dealers' associatiODS, on the 
same terms. 

In lail the secretary of the Western association stated that the success of the Reclp 
roeal Underwriters had been phenomenal. He asserted that It had saved over 54 per 
cfsit of the regular board rates, or over a quarter of a million dollars to its subscribers. 
He also claimed that Its success had in certain cases caused old-line companies to offer 
lower rates to regain the business. The Retail Implement Dealers' Mutual Fire Insurance 
Co., of Minnesota, has also repotted a successful career. Indeed, the secretary of the 
company, who is also secretary of the Minnesota Retail Implement Dealers' Association, 
asserts that the interest of the members in the association is chiefly In the insurance 
feature. In short, the insurance branch of association activity is looked upon as one of 
the strongest Inducements to membership in dealers* aasociationa. without which tiM 
latter would lose one of their beat drawing cards. \ 



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REDUCTION OF COSTS. 



77 



the practical establishment of a credit-information exchange bureau. 
In August he reported that after studying a number of such plans 
the conclusion had been reached that for a beginning the association 
could not do better than to follow the rules under which the National 
Association of Credit Men operated. At the annual convention in 
October, 1911, however, the committee on terms and credits reported 
that the plan of establishing a credit bureau had been temporarily 
set aside on account of the pressure of other important work. 
They recommended that when the bureau was inaugurated it pro- 
ceed along the lines followed by the National Association of 
Credit Men, namely, the exchange of personal experience of those 
interested in the dealer. This plan was explained as follows : 

A member submits a list of names of customers that he would 
like to secure information in reference to how they are paying 
their bills; if they discount or pay when due; the amount that 
they would be owing at the time the report was made, and the 
amoimt of goods bought for future delivery. The membership 
that would be interested in this account would make report, and 
in return for this information would get a summarized copy 
from the office as soon as it could be compiled. 

The report of this committee suggested that the bureau might also 
take up the tracing of lost debtors and possibly the reporting of 
insolvent and " judgment-proof " concerns, and those who had made 
disastrous failures, but were reengaging in business and endeavoring 
to secure goods from members of the association on credit. It was 
stated that such information would not be furnished in the form of a 
black list, nor anything of that character, but by ways and means 
entirely within the law and without liability to the association. The 
report concluded by recommending that a credit-information ex- 
change bureau be established as soon as possible. The committee 
expressed the opinion that while there was no question of the de- 
sirability of knowing the financial condition of customers some 
method was required to concentrate this information in a systematic 
way to be passed out to the members of the association. Subse- 
quently, in June, 1912, the executive committee of the association 
voted that the credit exchange department be considered as one of 
the four principal departments of association activity. 

At the next annual convention of the National Implement & Ve- 
hicle Association, in October, 1912, it was reported that it had been 
found on investigation that the establishment of the proposed credit 
bureau would require a larger sum of money than the association 
had at its command and it would, therefore, be unwise to start the 
work until the funds were at hand. 

While these plans were under discussion the secretary of the asso- 
ciation had made some attempt to locate missing debtors. In a post- 



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ITABM-MACHINEBT TRADE ASSOCIATIONS. 



script to a bulletin issued in March, 1911, he inquired if any member 
could furnish information as to the whereabouts of three concerns 
whose names were given, and in April, 1911, another bulletin was 
issued inclosing two sheets on which members were requested to list 
the names of lost debtors, one of the sheets to be returned to the 
secretary and the other to be retained by the member reporting. In 
the bulletin inclosing these sheets the secretary stated that the find- 
ing of lost debtors could be conducted while preparations were being 
made for the establishment of the credit bureau. He called atten- 
tion to the fact that the membership of the National Implement & 
Vehicle Association extended over the entire country and that a large 
proportion of lost debtors would probably again engage in the same 
line of trade. He urged, therefore, that it would pay each member 
to have its collection department furnish the association with a list 
of such delinquents to be bulletined under key to the entire member- 
ship. On May 8 a list of some 60 names that had been received in 
answer to this bulletin was sent to each member of the association, 
who was requested to turn the list over to his collection department 
with the request that any information available be reported to the 
association. In sending names for inquiries of this sort members 
were asked not to include any who were not lost delinquents nor any 
other than dealers. A few days later a bulletin was issued, which, 
among other things, stated there were a number of unreliable debt- 
collecting agencies operating throughout the country on various 
ingenious schemes concerning which the association could give in- 
formation to its members. 

Discussion at a meeting of the sales managers' department of the 
National Implement & Vehicle Association in June, 1913, brought 
out the fact that there was no general practice among the members 
in requiring dealer-agents to submit a statement of property. It was 
found that some companies required such statements from new cus- 
tomers, others only in cases of doubtful customers. Some of those 
present reported that the statements received were very inaccurate, 
due largely to a lack of desire on the part of traveling men to get 
them. It was suggested that some time in the future it might be 
possible to make the association a clearing house for property state- 
ments furnished by all dealers, copies to be issued to manufacturers 
who were interested. Recently the National Implement & Vehicle 
Association has submitted to the dealers for their consideration a 
form of property statement drafted for the purpose of securing uni- 
formity in the credit information furnished to the manufacturers by 
the dealers. This proposition has been favorably received by the 
dealen^ Federation.^ 






4 



> Some of the local clubs of dealers have attempted to compile credit ratings of farmers 
tai their locality* but the amount of work luTolved In such a compUation hac discouraged 



BEDUCTION OF COSTa 



79 



Sbcuritt for SALES. — One of the first committees created by the 
National Association of Agricultural Implement & Vehicle Manu- 
facturers was a committee on credits, to which the association re- 
ferred the question of the advisability of a uniform form of contract 
and kindred matters relating to credits. In January, 1897, the presi- 
dent of the association stated that a committee was considering the 
matter of uniform order blanks and financial exhibits, but had not 
made sufficient progress to justify a report. So far as shown in the 
earlier records of the association, however, this committee made no 
report on this subject. The executive committee had already reached 
the conclusion that the chattel mortgage laws in many States were 
both unfair and inequitable to mortgagor and mortgagee and had 
appointed a committee to attempt to draw a form of law to cover all 
of the States, for the benefit of the association and all others indi- 
rectly interested. 

The secretary of the Western Retail Implement & Vehicle Dealers' 
Association was present at the second annual convention of the 
National Association of Agricultural Implement & Vehicle Manu- 
facturers, in October, 1895, and explained to the manufacturers the 
efforts that had been made by the Western Retail Implement & 
Vehicle Dealers' Association to have changes made in the chattel- 
mortgage law of Kansas, which provided that such a mortgage 
should run only for one year, after which it must be renewed if the 
note remained unpaid, an additional fee being required for recording 
the renewal. He stated that his committee would be glad to answer 
inquiries on the subject from the manufacturers and receive their 
suggestions. 

At the convention held in November, 1896, the chairman of the 
committee on credits of the National Association of Agricultural 
Implement & Vehicle Manufacturers presented an oral report, in- 
dorsing the desirability of a "good straightforward" bankruptcy 
act, and later a resolution was adopted by the association authorizing 
the president to prepare a petition to Congress to pass the Torrey 
bankruptcy bill. In September, 1899, the executive committee of the 

others. The experience of a local organization of dealers in Jackson County, Mich., Illus- 
trates this. The club was organized In 1904, and later, after the members had entered 
into certain agreements. Including one requesting all members to add not less than 25 per 
cent, or one-fourth of the cost, to make a selling price, It was decided to adopt a code to 
be used in rating farmers living in the county, the compilation to be made from informa- 
tion furnished by members of the club from their experience. The plan was explained at 
A meeting of the State association in 1905, and one of the members pointed out the neces- 
sity for the dealer to have information upon which to determine whether credit should be 
extoided to farmers, especially to newcomers. He called attention to the fact that the 
various mercantile agencies furnish such information regarding business men, merchants, 
and manufacturers, but it was different in the case of farmers to whom the implement 
dealers sold goods. Considerable difficulty seems to have been experienced in keeping the 
information up to date and some of the members of the club have expressed the opinion 
that the preparation of such a list involves more time and labor than is warranted bj the 



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FABM-MACHINEBT TItADE ASSOCIATIONa 



association decided to take no action on a suggestion that it appeal a 
court decision in which it was held that labor liens had priority over 
chattel mortgages under certain conditions. 

The matter of uniform State laws governing chattel mortgages 
was discussed at a meeting of the executive committee in the fall of 
1908 and referred to the committee on State legislation. 

During 1008 the National Association of Agricultural Implement 
& Vehicle Manufacturers arranged for its attorneys to draft forms of 
sale and commission contracts, uniform in particular features, to be 
used by members of the association. One of the objects was to pro- 
vide for the possibility of retaining certain security for goods sold or 
delivered to a dealer in a foreign State until the mtinufacturer had 
received settlement or payment therefor. The various forms drafted 
by the attorneys were submitted to members for their criticism or 
approvaL 

In connection with a proposition to shorten terms (see p. 35) the 
National Wagon Manufacturers' Association during 1907 made an 
effort to devise a form of commission contract which would be more 
favorable to the members than the contracts then in use. 

At a meeting of the executive committee of the National Plow 
Association held in September, 1909, the subject of a uniform promis- 
sory note was brought up, but, as it was a matter of great importance 
to manufacturers in other lines, requiring legal advice, it was decided 
to leave this and two other similar matters to the National Associa- 
tion of Agricultural Implement & Vehicle Manufacturers. 

At ft meeting of the sales managers' department of the National 
Implement & Vehicle Association in June, 1913, one of the questions 
submitted for consideration was, "The title clause in contracts — 
what is its real value?" In discussing this topic many of those 
present reported that these clauses were used for their moral effect 
»nd because they could generally be relied upon except when the 
dealer became involved in bankruptcy. It was generally admitted, 
however, that they should not be considered in determining credit 
risks, as the decisions of the courts in bankruptcy cases had impaired 
their value. 

CitEorrs IN THE THRESHER TRADE. — ^Thrcshing outfits, consisting of 
engine and separator with an attachment for stacking straw and 
chaff, are usually sold to a distinct class of purchasers, called thresh- 
ermen, who thresh grain on contract. The outfits are so expensive 
that few of the purchasers are able to pay for them in cash. This 
makes it necessary for the manufacturers to sell to them on credit, 
taking assignments of earnings as security. The investment of capi- 
tal over such long periods, and the expense of collecting amounts 
due on the obligations of the threshermen, and in keeping track of 
the latter to avoid losses and to protect security of the character 



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EEDUCTION OF COSTS. 



81 



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mentioned, cause heavy expenses to the manufacturers. Indeed, the 
principal matter considered at the first meeting of the thresher 
manufacturers in 1884 was the prevailing custom of extending cred- 
its to purchasers. It was held to be the most urgent problem then 
demanding attention, and it was decided that the extreme terms to 
be made should provide for full payment not later than the first day 
of the third January following the sale. The records, however, do 
not show how closely this plan was adhered to. The thresher asso- 
ciation maintained a bureau from 1898 to 1902 to furnish data to 
enable members to act wisely in the matter of extending credits. 
In November, 1909, the association adopted the following resolution : 

Resolved^ That it is the sense of this Association that for the 
year 1911 no greater discount be allowed for cash than 6 per cent 
to agents or purchasers ; that on single sales the agents be allowed 
a maximum discount of 5 per cent if cashed in thirty days from 
date of delivery, and that the date for agents cashing all his 
season's business be fixed (not exceeding ninety days from date 
of delivery) in the agent's contract when made, and that pur- 
chasers be not allowed any cash discount later than ninety days 
from delivery of the goods. 

This resolution was affirmed in April, 1910. It was reaffirmed and 
somewhat amplified at a meeting in November, 1910, when the follow- 
ing resolution was adopted : 

Resolved^ that it is the sense of this Association that in 1911, 
no greater discount will be allowed for cash than six per cent, to 
the purchaser, and that purchaser be allowed no cash discount 
later than October 1st, of the year in which sale is made. 

That the maximum discount to the agent be five per cent on 
single sales if the sale is cashed in thirty days from date of 
delivery and that the date of the agent's cashing all the season's 
business be fixed in the agency contract not later than December 
1st of the year in which the sale is made at a discount for cash 
not to exceed six per cent plus interest from October 1st. 

In the latter part of 1911 this plan was reported to be produc- 
ing satisfactory results, and all members favored its continuance, 
but in 1912 it was reported that more complaints on price cutting 
and selling on extremely long terms had been received than ever 
before. In 1913 several matters affecting credits were discussed, 
among them that some cash payment should be insisted on in each 
case; that the period of credit on separators and small outfits be 
restricted to two years, with an extreme period of three years on any 
kind of threshing machinery. Resolutions were adopted recom- 
mending that members endeavor to increase cash payments and to 
bring about shorter terms. 

Improving financial condition of dealers. — One of the objects of 
the systematic campaign (see pp. 218-243) undertaken by the manu- 
facturers to educate dealers to a better knowledge of their costs of 

68248"— 15 6 



82 



FABM-MACHINEBY TBADE ASSOCIATIONS. 



BEDUCTION OF COSTS. 



83 



doing business was to improve the financial condition of the latter in 
order to make them better credit risks. It was felt that if the retail 
implement business could be put upon a more profitable basis much 
would be accomplished toward lessening the large number of failures, 
retirements, and other changes taking place among the dealers each 
year. 

The effort of the National Implement & Vehicle Association to 
establish a sales managers' department was due largely to the in- 
fluence which it was believed that such a department could exert 
in carrying on the cost-educational movement, and apparently to 
impress the members with the importance of the cost-educational 
work as a matter of improving credit risks. A resolution was 
adopted in October, 1911, requesting the members of the association 
to instruct their salesmen to take up and discuss the subject of the 
cost of doing business with the retail dealers with whom they came 
in contact, with a view to improving the condition of the retailers, 
and thus making them more permanent in the trade than had been 
the rule theretofore. Shortly after the convention the secretary and 
general manager issued a bulletin impressing upon members the fact 
that it was necessary for them to do something more than merely sell 
goods to the dealer if they desired permanent customers. He pointed 
out that resolutions mean nothing unless they are followed, and 
inquired of each member what he was doing to improve the condi- 
tions of the customers who needed it and, furthermore, if the mem- 
bers had ever requested their travelers to make an effort to induce 
dealers to reckon their costs in order to know positively whether they 
were making a profit. He stated that both he and the cost committee 
of the association would appreciate information as to what each mem- 
ber was doing along these lines. 

This bulletin was followed by another in November, 1911, on the 
subject of "Cost education: What it means to you and your cus- 
tomers," in which it was stated that the number of answers received 
in reply to the former bulletin had not been very large. In com- 
menting upon the value of the work the secretary and general 
manager went on to say: 

We have always contended that credit could not be safely 
extended without some knowledge of the business experience of 
the applicant, and whether he has qualified by reason of this 
experience, or business knowledge, to succeed. We also had the 
impression that the retailers of the lines we represent needed 
business education, perhaps more than any other. ♦ ♦ ♦ 

It is difficult to refuse an ex-farmer credit who has a deposit 
of $5,000 in the bank and a good reputation for honor and integ- 
rity in the community, still unless you or your travelers do 
something to help him get started in the safe business lines, the 



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chances are that he will eventually fail, losing all his own money 
and a lot belonging to you or some one else who is unfortunate 
enough to stick to him until the crash comes. 

♦ * * Y^Q are firmly of the belief that the sooner that all 
our members realize that it is profitable to assist their customers 
in this way, the sooner we shall have better conditions prevailing 
in the retail trade. If some one connected with each house 
would, every thirty days, send to their selling forces information 
of this character, either original or borrowed, the improvement 
would be noticeable within a very short time, just as the efforts 
made by the dealers themselves to spread cost education through 
their conventions, etc., has brought about very satisfactory 
results. 

The importance of the cost-educational work of the association was 
discussed and emphasized at a meeting of the executive committee 
held December 23, 1911, and the conclusion was reached that it 
should be urged at every opportunity, especially in its relations to 
the retail dealer. In this connection, the secretary of the association 
was instructed to ascertain how the Western Retail Implement & 
Vehicle Dealers' Association would regard a proposition to employ 
an expert bookkeeper and cost accountant in the territory of the 
members for a year, the cost to be divided between the two asso- 
ciations. 

A meeting of the sales managers of the National Implement & 
Vehicle Association was held at Chicago in February, 1912. One 
of the topics discussed was the responsibility of the salesman as to 
credits. The matter of cost education as related to dealers was con- 
sidered and a thorough consideration given to what could be done 
by the sales managers through their travelers or otherwise to improve 
existing conditions. At this meeting a former manager of a branch 
jobbing house at Kansas City outlined some of the benefits that 
would accrue from a sales managers' department, citing his experi- 
ence where the cultivation of better acquaintance with his com- 
petitors had been worth thousands of dollars in handling trade and 
in the making of credits. The sales managers present at this meeting 
indicated their interest in the cost-educational work by unanimously 
expressing their willingness to aid the work and support a feasible 
plan when devised. No verbatim report was made of the personal 
experiences recited at this meeting, since it was thought best that the 
utmost freedom of expression should prevail. In the bulletin con- 
taining a report of this meeting, members of the association were 
reminded that it was their duty to build up the sales managers' de- 
partment, not only by their personal attendance but also by urging 
competitors to attend. 

The efforts that have been made to carry on the cost-educational 
work are described in more detail elsewhere. (See Chap. VII, sec. 5.) 



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PARM-MACHINEBY TRADE ASSOCIATIONS. 



J 



BEDUCTION OF COSTS. 



85 



Section 6. Beduotion in costs of distribution. 

Manufacturers, wholesalers, and dealers alike contend that there 
are certain unnecessary or excessive expenses that have grown up 
under the present system of selling through retail dealers. Manu- 
facturers and wholesalers complain of various practices on the part 
of dealers that tend to increase selling costs, while dealers believe 
that unduly aggressive competition on the part of manufacturers 
and wholesalers has a similar tendency. Furthermore, manufac- 
turers, jobbers, and dealers alike are opposed to price cutting by 
dealers. Nevertheless all classes in the trade recognize that if the 
dealer is to continue to be an important factor in the distribution of 
machines the system of which he is a part must not impose too great 
an expense upon the industry. This is looked upon as a vital prob- 
lem, the solution of which requires close cooperation between the vari- 
ous manufacturers and wholesalers, and also between manufacturers 
and wholesalers on the one hand and dealers on the other. 

The smaller manufacturers and wholesalers are especially con- 
cerned with the increasing cost of distribution. The recent develop- 
ment of several large companies into full-line houses, with excep- 
tional financial resources, carrying a large variety of the principal 
kinds of farm machinery, has been a matter of deep concern to 
smaller companies. The abundant resources of the large companies 
permit them to employ expensive selling organizations, to spend 
much money for advertising, and to carry goods with dealers on con- 
signment or on unusually long terms. By these means the larger 
companies absorb the services of an undue proportion of the total 
number of dealers. The net result of the situation is that the smaller 
short-line manufacturers are seriously handicapped by the expense to 
which they are put in selling the output of their factories. In many 
cases it is probably true that the aggregate selling expenses of the 
manufacturer, the wholesaler, and of the dealer, equals or exceeds the 
factory cost of goods. 

Owing perhaps to the fact that the larger manufacturers are mem- 
bers of the National Implement & Vehicle Association, no positive 
action along fundamental lines has been taken by that organization to 
relieve the smaller concerns. Members of that association, however, 
are strongly impressed with the necessity for curtailing what is de- 
scribed as the " increasing cost of distribution." In October, 1913, the 
chairman of the executive committee of the National Implement & 
Vehicle Association told the delegates to the National Federation of 
dealers' associations that this is one of the greatest problems now 
confronting the manufacturer. The delegates were urged to make 
vigorous and persistent use of their influence in eliminating certain 
practices by which the manufacturers thought the cost of distribu- 



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tion was unnecessarily increased. Specific practices of this sort that 
were complained of by the manufacturers, included excessive de- 
mands upon the manufacturer for donations, and for personal and 
financial help in selling and setting up goods sold to farmers; expense 
arising from failure of dealers to live up to the terms of their agency 
contracts, and from failure to pay adequate attention to new and use- 
ful machines; lax methods of conducting business; and excessive 
demands for carrying over unsold goods. On account of the great 
number of new dealers who enter the retail implement trade each 
year the manufacturers believe that a constant campaign is needed to 
agitate matters of this kind. 

The entire Federation was invited to be present at the annual 
convention of the National Implement & Vehicle Association in 
October, 1913. In extending this invitation the secretary of the 
National Implement & Vehicle Association said : 

The time has arrived, we believe, that the retailer of the lines 
we represent ought to understand fully the situation relative to 
the manufacture of these lines and the problem connected 
with it. 

At this convention one of the features was a discussion between 
the chairman of the executive committee of this association and the 
president of the Iowa implement dealers' association on the subject 
of problems of distribution, the object being to find some way to 
reduce selling costs by the process of elimination of needless expense. 
The Bulletin, the official organ of the federated dealers' associations, 
in commenting upon this discussion, expressed the hope that it would 
do much toward securing that real cooperation between manufac- 
turer and dealer which it was apparent had become necessary if the 
dealer was to continue to be the medium through which the product 
of the implement factory reaches the farmer. At this convention of 
the manufacturers' association a resolution was adopted urging upon 
members the positive necessity of reducing to a minimum the cost of 
marketing products and soliciting the cooperation of the dealers. 

The dealers recognize the fact that the manufacturer will natu- 
rally endeavor to reach the user of his products through the channel 
that affords the greatest volume of business at least cost for distri- 
bution. In referring to this fact the secretary of the Western asso- 
ciation declared that the dealers have it in their power to demon- 
strate that they offer the cheapest channel of distribution and that 
they must make this fact clear to the manufacturers. 

While the danger to the regular implement dealers of competi- 
tion from direct selling concerns is believed by many to have been 
greatly exaggerated, one result has been to create a belief among 
dealers that they are required to pay too much for goods sold to them 
through wholesale houses. Furthermore, the federated dealers' asso- 



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FABM-MACHINEBT TBADE ASSOCIATION& 



REDUCTION OF COSTS. 



87 



eiations claim that they aro studying methods of catalogue houses to 
enable the dealers to compete with them successfully. In this connec- 
tion the question has been raised whether there is not some way in 
which dealers can get nearer the source of supply. The solution of this 
problem through cooperative buying in quantity direct from the fac- 
tories, by uniting the orders of a number of dealers, has been opposed 
by manufacturers. Another plan under which it is proposed that 
dealers shall sell from syndicate catalogues and deliver goods ordered 
therefrom has met with little favor from the regular trade and has 
been disapproved by the National Federation of Implement & 
Vehicle Dealers' Associations. 

The dealers' associations have made little progress in efforts to 
secure lower prices from manufacturers and wholesalers, through 
the curtailment of expense which they claim could be effected if man- 
ufacturers and wholesalers would discontinue the employment of 
canvassing salesmen and the sale of goods on extremely long terms. 
In this direction the interests of regular dealers and of manufac- 
turers without exceptional resources are much the same.* 

One of the most recent proposals of the dealers to reduce the cost 
of distribution is to reduce the needless variety of different types 
and sizes of different kinds of farm machinery and implements, 
which it has been customary for dealers to carry in stock. This 
method of reducing costs was brought up by the National Federa- 
tion at a conference with manufacturers representing the National 
Implement & Vehicle Association in October, 1913. The latter as- 
sured the dealers that the manufacturers were even more deeply 
interested in the advantages of standardization than were the dealers. 
The dealers were told that the farm-wagon department of the Na- 
tional Implement & Vehicle Association was then engaged in an 
effort to standardize wagon construction to the extent of eliminating 
certain sizes and that it was expected that the wagon manufacturers 
would soon present a request for the cooperation of the dealers. 

The character of the warranty, as an element in the costs of dis- 
tribution, has been a matter of difference between competing manu- 
facturers, and also between manufacturers and dealers. As between 
manufacturers and dealers the question of warranty is as to which 
shall beai* the expense of replacing . broken parts. Manufacturers 
claim that dealers are too liberal in this respect, especially when the 
expense can be shifted to the former. 

The matter of warranties came up prominently in 1913 by reason 
of legislation on the subject which had been passed in the Prov- 
ince of Alberta, Canada, and in the State of North Dakota. The 
Alberta act provided that notwithstanding any agreement farm ma- 

1 See report of the Commissioner of Corporations on the International Harvester Co., 
pp. 270-288. 



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chinery should be sold under an implied warranty guaranteeing it 
to be of good material, to be properly constructed both as to design 
and workmanship, to be in good working order to satisfactorily per- 
form the work for which it was intended, to be free from latent and 
other defects, and to be in every way so designed and constructed as 
with proper care and use to have reasonable durability. It was felt 
by members of the National Implement & Vehicle Association that 
this law would work a great hardship upon every manufacturer 
selling goods in that province. Later it was announced that the act 
had resulted in the withdrawal of a number of concerns from doing 
business in Alberta and had caused others to restrict their business 
to those only who were considered choice credits, and it was asserted 
that the law bore even more heavily upon the farmer whom it was 
intended to benefit. It was thought that the law would render the 
manufacturers' collections difficult, and it was reported that several 
instances had occurred where farmers had repudiated their obliga- 
tions. The passage of a similar law in North Dakota in 1913 (Ses- 
sion Laws, chap. 218) was also called to the attention of the members 
of the National Implement & Vehicle Association in an effort to 
arouse them to protest the passage of such laws. These laws were 
regarded as having been brought about by the unfair dealings of 
one or more concerns, although the law placed the restriction upon 
all. The secretary urged that an effort be made to enlighten both 
dealers and consumers as to the ultimate effect of such laws in in- 
creasing the expense of doing business and in advancing prices. 

At the present time (March, 1915) both the National Implement 
& Vehicle Association and the National Federation of Implement & 
Vehicle Dealers' Associations are active in devising methods of 
eliminating and curtailing the expenses incident to the sale of farm 
machinery through the retailer. At the annual meeting of the Na- 
tional Implement & Vehicle Association in October, 1914, the retiring 
president stated his belief that — 

no problem confronting us today exceeds in importance that of 
economically marketing and distributing our products. 

The report of the executive committee of the association pointed 
out that the expense of selling farm machinery had increased very 
materially from year to year until it had become one of the manu- 
facturers' heaviest burdens. The committee on dealers' associations, 
however, declared that, so far as agricultural implements are con- 
cerned, the retail dealer is a necessity and is the best medium in the 
distribution of the manufacturers' goods to farmers. The report of 
this committee called attention to the expense involved in the tend- 
ency on the part of manufacturers and dealers to yield to demands 
for excessive service. It also cautioned the manufacturers against 



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88 



FARM-MACHINERY TRADE ASSOCIATIONS. 



placing agencies too close together and against overloading dealers 
with more goods than they require. 

At this convention the sales managers' department reported that 
its members had held two important conferences with the dealers 
during the year, at which various topics of mutual mterest had been 
discussed. At these conferences various suggestions for the more 
economical conduct of the retail trade were considered, such as the 
more careful use of advertising matter sent to dealers for distribu- 
tion, cooperation in replacing defective parts and in returning them 
to the factory, and the use of a common form of property statement 
to be submitted by dealers seeking credit for goods ordered. The 
most important result of the conferences between the manufacturers 
and dealers appears to have been the appointment of the secretaries 
of the various constituent associations of the Federation as a commit- 
tee to act with the manufacturers' association in an effort to advance 
the standardization movement by assisting in the elmiination of un- 
necessary sizes and types of machines, wagons, etc. This step was 
taken at the request of the manufacturers that the Federation appoint 
a committee for this purpose. In making this request the manufac- 
turers declared that, unless such standardization could be effected, 
they would be compelled to advance prices. Furthermore, they as- 
serted that the standardization could not be accomplished without the 
cooperation and support of the dealers. At the meeting of the 
Federation held in October, 1914, the delegates adopted the following 
resolution : 

By the ever increasing multiplicity of styles and sizes, manu- 
facturers and jobbers have added cost upon cost to their overhead 
expense. There are too many travelers, executives and canvassers 
who add to the cost of the goods to the dealer. Many of these 
wastes m cost of distribution should be eliminated and all un- 
usual styles and sizes should be discontinued. Keforms along 
this line should be assisted by the retail dealer, so that he may be 
enabled to sell goods at lower prices to the consumer, obtain a 
fair profit and give good service. 

At the same meeting at which the above resolution was passed and 
at which the secretaries of the various associations were appointed as 
a committee on standardization, the Federation delegates also ap- 
pointed a, committee to investigate and report at the next annual 
meeting whether some plan could not be adopted by which dealers 
could get some of the smaller articles in their line, outside of trade- 
marked goods, at lower prices. 



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CHAPTER IV. 

ACTIVITIES OF MANUFACTURERS' ASSOCIATIONS WITH RESPECT 

TO LEGISLATION. 

Section 1. Introduction. 

The executive committee of the National Association of Agricul- 
tural Implement & Vehicle Manufacturers was given general charge 
of all matters of legislation affecting members and their patrons. 
A standing committee on legislation was created, with instructions 
to keep a sharp lookout for such matters, but its duties were after- 
wards divided between a committee on national legislation and one 
on State legislation. In 1895 the committee on legislation recom- 
mended that the efforts of the association in the matter of legislation 
should not be confined to the prevention of obnoxious laws or their 
repeal when enacted, but that effort should be made to frame and 
secure the passage of laws, both State and national, that would 
protect and promote the interests of the members without impairing 
the rights or interests of the general public. To secure the enact- 
ment of such kws, the executive committee was empowered to confer 
with other associations of manufacturers with reference to coopera- 
tive action. 

In 1895, the executive conmiittee was authorized to subscribe to 
the membership of the National Association of Manufacturers and 
to appoint delegates to its next convention. In October, 1898, a so- 
called conference committee was given charge of proposed coopera- 
tion with kindred associations to secure national legislation, and in 
October, 1908, a recommendation was approved that the association 
cooperate with the National Association of Manufacturers along such 
lines as their common interests might justify. The same year a pro- 
posal was made to employ men at State capitals to report on measures 
introduced in State legislatures, and, for a time, a committee, known 
as the " States Committee," was maintained with a member in each 
State to look after legislation and report all obnoxious measures. In 
1910, however, the States committee was discontinued. 

So far as shown by the records, the wagon, plow, and grain-drill 
manufacturers' associations, as organizations, gave little attention to 
matters of legislation. Many of the members of these associations 
were also members of the National Association of Agricultural Im- 
plement & Vehicle Manufacturers, and, largely for this reason, legis- 






•III 



rARM-MACHINERY TRADE A8800IATI0NS. 



> 



ACTIVITIES WITH RESPECT TO LEGISLATION. 



n 



lative matters were left to be handled by the latter association, which, 
with its larger membership, was thought to be more influential. 

The principal matters of legislation to which the manufacturers' 
associations have devoted attention, are those relating to taxation 
of corporations, industrial indemnity, and manufacturing opera- 
tions ftt State penal institutions. Considerable attention has also 
been given to legislation relating to credits and collections, the tariff, 
and patents. 

The associations of implement dealers have l»een most active in 
opposing the enactment of parcel-post legislation (see p. 198), and 
have also given much attention to legislation relating to manufac- 
turing operations at State penal institutions (see p. 107) and to com- 
mercial transactions. In such matters they have sometimes received 
the support of the jobbers' club in the same distributing territory. 

The matter of employing legal counsel to look after the general 
interest of the association was brought up at a meeting of the execu- 
tive committee of the National Association of Agricultural Imple- 
ment & Vehicle Manufacturers in January, 1897, but it was thought 
best to ascertain what the National Association of Manufacturers 
proposed doing in the matter. In November, 1898, the chairman of 
the executive committee was authorized to employ legal counsel when- 
ever he found it necessary to do so. In November, 1900, a committee 
on attorneys and litigation was created, and the chairman was in- 
structed to accept the proposition of a firm of Chicago attorneys to 
act as counsel for the association. Since 1900 this arrangement has 
apparently been renewed annually. By direction of the association 
the attorneys have conducted litigation in which the association has 
been interested, especially suits to determine the rights of foreign 
corporations under the laws of various States. 

The National Implement & Vehicle Association has continued the 
work in respect to legislation and litigati(m formerly conducted by 
the National Association of Agricultural Implement & Vehicle Manu- 
facturers. The standing committees on attorneys and litigation, 
national legislation, State legislation, tariff, patents, and others, 
have been retained. Furthermore, at the convention in October, 
1911, a committee on political action was created, to secure united 
political action on the part of business men against what was char- 
acterized as existing tendencies toward adverse class legislation. In 
recommending this step, the committee on State legislation reported, 
in part, as follows: 

Your committee are of the opinion that the public should know 
and realize the importance of these conditions, and that it is up 
to the business men of this countrv to act together as a unit 
upon this problem, for upon its solution along right lines de- 
pends as much as upon any other one thing the future growth 



i 



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and prosperity of this country. And again we emphasize, in 
this connection, the importance of the business men unitmg for 

political action. 

♦ ♦ * Throughout this report we have endeavored to point 
out to you, as your committee sees it, the importance of business 
men entering the political field, and we have intentionally stated 
business men instead of business interests, because the trend of 
recent legislation, National as well as State, has been against the 
corporation and " the interests," so called, and which at the out- 
set was aimed at the big interests known as the trusts and later 
at the railroads, but which to-day, if not being actually leveled 
at, is reacting upon all legitimate business interests, and justly 
or unjustly, our businesses are all being tarred with the same 
stick, known by both political parties as "the interests," and, 
therefore, practically speaking, we are all political outcasts. 

In the minds of your committee, the important step to be taken 
now is the formation of, or domination of a political organiza- 
tion which shall be of sufficient strength and sanity to keep us 
safely building upon the foundation structure of our constitu- 
tion and not upon the quick sands of many of the present-day 
political theories. 
The committee on political action was invited to be present at a 
congress of the National Business League of America, described as 
" an alliance of leading diversified interests of the United States for 
the promotion of national legislation and the advancement of 
American commerce and industries." This congress, held at Chi- 
cago in the latter part of 1911, authorized the appointment of a com- 
mittee to formulate a declaration of principles and purposes, reflect- 
ing the demands of the commercial, industrial, and business interests 
represented— something that the two dominant political parties 
might be asked to embody in their platforms. The executive com- 
mittee of the National Implement & Vehicle Association directed its 
committee on political action to continue negotiations and cooperate 
with the National Business League and report to the executive com- 
mittee of the National Implement & Vehicle Association when 
definite action was finally determined upon. The National Business 
League held another meeting in June, 1912, and adopted the plat- 
form that had been formulated by its committee. The resolutions 
adopted by the National Implement & Vehicle Association in 
October, 1912, substantially embodied this platform. 

The report of the committee on State legislation at the convention 
in October, 1912, referred to the organization of the Chamber of 
Commerce of the United States of America at Washington, D. C, 
in April, 1912, for the purpose of forming a representative body 
of commercial organizations and interests which by representation 
could be consulted in relation to the commercial needs of the United 
States in both domestic and foreign trade. One of the principal 



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92 



FABM-MACHINERT TBADE ASSOCIATIONS. 



ACTIVITIES WITH RESPECT TO LEGISLATION. 



9S 



objects of the Cliamber of Commerce is to be watchful of legislation 
affecting the business interests of the country. 

In referring to membership in the Chamber of Commerce of the 
United States, the executive committee of the National Implement 
& Vehicle Association reported as follows: 

Our membership in, and affiliation with many of the more 
important commercial organizations of the country, puts us, as 
it were, in the very center of things, enabling us to bulletin all 
important information quickly. The Chamber of Commerce 
of the United States, i*ecently formed to unite as far as possible 
business organizations in or^er that the wishes of the majority 
might at any time be reduced to concrete form for the benefit 
of the President, Congress, or any other department of the 
Government, when questions of domestic or foreign interest 
arise — we are membei*s of, and cooperating with this organiza- 
tion we expect it will develop in time to be a most valuable aid 
to our work. 

In a pamphlet issued by the National Implement & Vehicle Asso- 
ciation during 1911, the scope of the duties of its committees on 
national and State legislation was explained as follows: 

Our committee on National legislation, composed of live man- 
ufacturers, act as an advisory body to direct the general office 
as to action which should be taken to alarm our members when 
pernicious or detrimental legislation is introduced at the na- 
tional capital, or to counsel their cooperation and support to 
legislation of beneficial character. 

Our committee on State legislation are watchful for the in- 
terests of our members in such legislation as relates to labor, 
taxation, transportation, rights of corporations within and with- 
out the State, etc. 

The committee on national legislation in its report to members at 
the annual convention in October, 1912, suggested : 

That every member of this organization constitute himself a 
committee of one to give strict attention to the next session of 
Congress calling the attention of your next committee on Na- 
tional legislation to any bills you deem of interest to manufac- 
turers in our lines, expressing at the same time your views to 
assist the committee in determining its course. This suggestion 
is not made to relieve the committee of its duties, but to bring 
about proper interest in important legislation which heretofore 
has had too little attention from the average business man until 
too late. 
The duties of these committees and various recommendations re- 
garding their methods of work are also referred to elsewhere in the 

i-eport. 

At the annual meeting of the National Implement & Vehicle Asso- 
ciation in October, 1913, the attorneys of the association reported 
that the multitude of different laws affecting corporations in the dif- 



il I • 






ferent States was a serious burden upon business enterprise; that 
there was an opportunity for the association to do a great amount of 
effective work; and that although there were organizations which 
could furnish copies of bills embodying legislation affecting business, 
it was nevertheless necessary for the interested parties to protect 
their rights. In this connection, they suggested that an association 
might be organized among the secretaries or managers of several 
large associations of manufacturers and dealers to provide some 
method of investigating and correcting such proposed legislation. 
The report of the committee on State legislation also indicated the 
difficulties of handling the situation in a practical way, involving the 
necessity of analyzing all bills presented and of securing the cooper- 
ation of those interested to appear either by committee or otherwise 
before the various legislative committees. They asserted that no one 
organization could alone furnish service of this sort unless it was 
organized for that express purpose, and, in this connection, suggested 
that, as the desired information could be procured through reliable 
channels, a special committee composed of representatives from 
various commercial organizations through the country might be or- 
ganized to direct all activities regarding such legislation. The com- 
mittee suggested that a plan of cooperation with other organizations 
might be inaugurated to start a movement among the business inter- 
ests of the country either for a campaign of education as to needed 
legislation or for promoting efforts to modify or repeal detrimental 
legislation. 

Section 2. Taxation of corporations. 

State taxation of foreign corporations. — Most of the members 
of the National Implement & Vehicle Association are organized as 
corporations under the laws of some State. As their products are 
sold in many different States, the payment of franchise fees and 
other taxes imposed on foreign corporations by laws of the different 
States is quite an expense. Various plans of relief have been con- 
sidered. To avoid the liabilities under such laws, members of the 
association are advised to conduct their business in such a manner 
that it will be interstate in character. To accomplish this, consider- 
able attention has been devoted to an effort to devise satisfactory 
forms of agency contracts between manufacturers and dealers. Fur- 
thermore, the association has for years advocated the passage of a 
national incorporation law, and until such a law can be passed the 
manufacturers favor uniform State laws governing corporations. 
Many of the questions submitted to the attorneys of the association 
relate to methods of conducting selling operations in order to avoid 
payments required by the corporation tax laws of various States. 



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94 



FABM-MACHINEBY TEADE ASSOCIATIONai 



ACTIVITIES WITH RESPECT TO LEGISLATION. 



95 



I 



This matter of State taxation was one of the most important 
problems confronting the implement and vehicle manufacturers at 
the time the National Association of Agricultural Implement & 
Vehicle Manufacturers was organized, in 1894. Many of the mem- 
bers, organized as corporations, owned warehouses in other States, 
to which shipments were made for reshipment. To determine 
whether such companies were engaged in interstate commerce in 
a sense to render them exempt from the payment of a franchise 
fee, it was decided to test the law in the State of Michigan by bring- 
ing a friendly suit in the name of a manufacturing company, incor- 
porated in Ohio, against a Michigan dealer. Arrangements were 
made with both parties to the suit, the expenses, including attorneys' 
fees for both sides, being paid by the association. It was felt that 
a decision by the Supreme Court of the United States favorable to 
the association would establish a precedent of great benefit. 

The United States Circuit Court for the Eastern District of 
Michigan decided in favor of the manufacturing company on the 
ground that the statute of the State of Michigan was unconstitu- 
tional as an attempt to regulate interstate trade. On appeal to the 
Supreme Court of the United States the judgment of the circuit 
court was affirmed, but the higher court did not find it necessary to 
pass upon the constitutional question, as the contract upon which 
the suit was brought had been consummated or made in the State of 
Ohio, and, according to the terms of the Michigan law, the contract 
would have to be made in Michigan for the law of that State to 
apply. (Holder v, AultmaU; 169 U. S., 81.) 

While this decision did not clearly define interstate trade, it indi- 
cated one way in which the foreign corporation tax laws of the 
States might be avoided. It was decided to put the decision in con- 
cise form, and to send it to all members of the association, accom- 
panied by a letter advising them not to pay a franchise tax in States 
where their business was not located. In case of suit, they were to 
refer the matter to the secretary of the association that a test suit 
might be brought. The association proposed "to hold harmless" 
any member engaged in interstate commerce, who might be sued for 
refusing to comply with statutes affecting foreign corporations which 
were deemed to be unconstitutional. 

In 1906 the attorneys of the association were directed to institute 
two other suits, at the expense of the association, to test the foreign 
corporation laws of Texas and Kansas, respectively. 

As in the Michigan case, the object of these suits was to secure an 
opinion from the Supreme Court of the United States as to whether 
companies, such as those in whose names the suits were brought, were 
engaged in interstate trade in a sense that would bring them under 
the commerce clause of the United States Constitution in such a way 



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as to free them from the operation of State corporation franchise 
tax laws. In the Texas case, however, it was not necessary for the 
court to pass upon this point, since the allegation of the company 
that it was engaged in interstate business was not denied by the 
State. The court refused, however, to aid the company in recovering 
taxes that had been paid, as the money had been paid voluntarily an i 
not under compulsion of law. (Gaar, Scott & Co. v. Shannon, 223 
U. S., 468.) 

In the Kansas case the Supreme Court of that State decided that 
the manufacturing company, in whose name the suit was brought, 
could not maintain an action in the State courts unless it complied 
with the foreign corporation laws of the State, even though the 
orders taken by a traveling salesman were sent to Illinois for ap- 
proval and shipment. On appeal by the company — there being no 
appearance for the defendant in error — the Supreme Court of the 
United States reversed this judgment without rendering a written 
opinion. (Wilson-Moline Buggy Co. v. Hawkins, 223 U. S., 713.) 

Early in 1911 the executive committee of the National Implement 
& Vehicle Association instructed the attorneys of the association to 
commence suits to test the right of the State and county taxing 
bodies in Arkansas in seeking to tax notes and credits arising out of 
the sale of goods. It was held by the association that, as the trans- 
action was purely one of interstate commerce, to tax notes and 
credits taken in the State for goods manufactured outside the State 
was to tax property outside the State. 

In referring to the activities of the National Implement & Vehicle 
Association in bringing these suits, the committee on attorneys and 
litigation at the annual meeting in 1912 made the following state- 
ment: 

No one company can afford to appeal these cases and take 
them to the Supreme Court. It would be much less expensive to 
pay an unjust tax, or an unjust tax assessment, rather than go to 
that expense and annoyance and trouble. The association has 
taken this work from the manufacturers in many cases in the 
past to the great benefit of the membership. 

A decision of the Supreme Court of South Dakota in a suit^ to 
which none of the members of the National Implement & Vehicle 
Association was a party was considered to be so important to the 
members of that association that its attorneys were instructed to 
procure the appeal of the case to the Supreme Court of the United 
States. The expense of this appeal was to be borne by the association 
assisted by the National Association of Credit Men and the National 
Association of Manufacturers. 

A resolution adopted at the convention in 1912 advised the mem- 
bers to give greater heed to the recommendations of the attorneys as 

1 Sioux Remedy Co. v. Cope, 133 N. W. 683 (1911). 



96 



FABM-MACHINERY TBADE ASSOCIATIONa 



ACTIVITIES WITH RESPECT TO LEGISLATION. 



97 



to noncompliance with State laws relative to franchise taxes and 
license fees, where a strictly interstate business was being conducted 
in a foreign State. 

The members of the implement and vehicle manufactuers' associa- 
tion have repeatedly adopted resolutions favoring a national incor- 
poration law as a means of relief from the liabilities imposed by State 
laws. At the annual meeting of the association in October, 1912, the 
attorneys of the association made a similar recommendation. They 
advised that a national incorporation law " should be specific in de- 
fining the powers of the corporation and prescribing its limitations 
and be so framed that when a corporation is incorporated thereunder 
its managers may know definitely and specifically what their powers 
and rights are ; what limitations are placed upon them and that out- 
side of such limitations imposed by the act, that they shall be as 
free as individuals to transact their business and sell their wares 
throughout the United States and wherever the American flag flies, 
unhampered and unencumbered by State lines and State statutes." 

Federal corporation tax. — Although the National Implement & 
Vehicle Association favors a Federal incorporation law it was op- 
posed to the Federal law of 1909 taxing corporations. In the early 
part of 1910 the attorneys for the implement association had advised 
that no reports be made to the Government under the corporation 
tax law, unless accompanied by a letter protesting the constitution- 
ality of the act. Members of the association were urged to confer 
with the secretary of the association before making any report. In a 
letter to members of the association dated in January, 1910, the chair- 
man of the executive committee said, in part : 

We are aiding indirectly those who are expecting to contest 
the constitutionality of the act, and directly those favoring an 
amendment or repeal of the act, but * * * we regretfully 
believe that incorporated companies must face the issue and 
prepare to make their imports. 

Members were advised that the attorneys of the association believed 
the law to be unconstitutional. Forms of protest to be filed by mem- 
bers against the collection of the tax, and also against the publicity 
feature of the act, were inclosed in this letter. It was reported that 
steps had been taken to secure an amendment or repeal of the pub- 
licity clause. A circular letter dated February 4, 1910, and signed by 
the chairman of the executive committee, read, in part, as follows : 

Your executive committee has been active individually and 
by cooperation with other associations and interests in the effort 
to induce Congress to repeal the publicity clause in the corpora- 
tion tax law. The repeal * * ♦ would require an amend- 
ment of the tariff act of August 5, 1909. Such an amendment 
brought in to the House would be open to amendment for every 



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item in the tariff law, both in the House and in the Senate, 
and would result in opening up the tariff question and you can 
realize as well as I do what a paralysis this would cause to busi- 
ness generally. It is very much to be regretted that the offensive- 
ness of this particular clause was not as fully realized when the 
bill was imder discussion as at this time. 

On June 9, 1910, the secretary of the National Association of Agri- 
cultural Implement & Vehicle Manufacturers issued a circular letter 
to members advising them that the various suits brought to test the 
constitutionality of the law had been reassigned for hearing at the 
October term of the Supreme Court, and members were urged "to 
immediately request your Representatives in Congress to have the 
law so amended that payment of the tax will not be required until 
the Supreme Court renders its decision. An amendment such as we 
suggest would avoid the necessity of payment of the tax at this time 
and a refund of the amount in case the law is declared unconstitu- 
tional." 

In July, 1911, the secretary issued a bulletin quoting a bulletin of 
the Wisconsin Manufacturers' Association relative to the payment of 
the penalty for failure to comply with the Federal corporation-tax 
law, advising members to pay under protest, and later in the month 
members were advised of the text of a bill introduced in Congress to 
provide for a refund or abatement of the tax under certain conditions. 
Later, the secretary stated : 

We have taken the matter up with the American Association 
of Public Accountants with whom we have been working since 
the bill was introduced and will be prepared to do our part at 
the proper time. * * * it is probable that later we will want 
the cooperation of every member in stirring up their Congress- 
men, at which time you will be duly advised. 

This was followed in a few days by another bulletin urging mem- 
bers to write their Congressmen at once along lines suggested in the 
bulletin, commending another bill introduced on the same subject on 
December 5. Members were requested to notify the secretary of the 
association when they wrote their Congressmen, and a little later 
the secretary notified members of the replies that he had received 
from members who had written their Congressmen. He also com- 
mended a suggestion that large results might be obtained if the 
members could arouse interest on this subject among the local busi- 
ness associations with which they were connected. 

Section 3. Legislation relating to the tariff and foreign trade. 

The importance of tariff legislation to manufacturers in the imple- 
ment industry is shown by the fact that the organization of the 
National Association of Agricultural Implement & Vehicle Manu- 

68248*'— 15 1 



98 



l-ABM-MACHINEKY TRADE ASSOCIATIONS. 



ACTIVITIES WITH RESPECT TO LEGISLATION. 



99 



facturers, in April, 1894, was due very largely to the tariff legisla- 
tion of that year. Earlier in the year, in February, representatives 
of a number of concerns engaged in the manufacture of various kinds 
of farm machinery met at Chicago and appointed a committee to 
protest against the free admission of agricultural implements from 
other countries, except under reciprocal arrangements. It was 
claimed that the work of this committee resulted in securing an 
amendment to the Wilson tariff bill, providing that the then existing 
duties be retained on specified articles from countries that imposed 
an import duty on like shipments from the United States. The 
success of this committee afforded a concrete example of the value of 
collective action among implement manufacturers in different lines, 
and helped to bring about the formation of the National Association 
of Agricultural Implement & Vehicle Manufacturers. 

After the association was organized, resolutions intended to pro- 
mote foreign trade were adopted from time to time, such as urging 
upon Congress the importance of maintaining the consular system 
upon a high standard of efficiency and favoring the establishment of 
a strong American merchant marine. In 1896 the association selected 
a representative to accompany a party of members of the National 
Association of Manufacturers to South America to investigate trade 
conditions. Subsequently the association devoted considerable time 
to discussing ways and means of extending the trade of its members 
in South American countries. At the convention held in October, 
1898, resolutions were adopted, recommending that a special com- 
mittee be sent to confer with officials of the Department of State 
regarding the interests of the members of the association in the so- 
called Kasson treaties of reciprocity that were being negotiated. 

In November, 1905, a committee was appointed to consider the 
interests of the association as to the tariff and reciprocity, and, in 
that connection, to appear before any committee of Congress at any 
time in its discretion. The report of this committee, made in August, 
1906, recommended a very considerable reduction in the duties on 
the materials used in the manufacture of implements, particularly 
iron and steel. An extensive discussion among the members of the 
executive committee followed the reading of this report, and the 
question was raised, assuming the accuracy of the facts reported, 
whether it would be best for the association to undertake an agitation 
for a revision of the tariff, with its possible disadvantageous conse- 
quences (See p. 59.) The committee was directed to continue its 
investigations, and, in December, 1906, a standing committee on the 
tariff was created. In November, 1908, this committee was author- 
ized and directed to attend the hearings of the Ways and Means Com- 
mittee on matters affecting implements, with the idea of securing a 
reasonable tariff on implements and vehicles and a material reduc- 
tion on certain raw materials which the implement manufacturers 



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believed to be overprotected. The executive committee also ordered 
the report of the tariff committee, made at the convention a short 
time before, to be published, providing it had been revised in ac- 
cordance with the wishes of the association. 

The association favored the creation of a Federal tariff board, and 
in 1910 elected one of its members to a place on the National Tariff 
Commission Association. Members of the National Association of 
Agricultural Implement & Vehicle Manufacturers were urged to 
write their Senators and Congressmen at once, recommending the 
passage of a bill making an appropriation for the Tariff Board. 

In the latter part of 1910 the tariff committee reported to the 
executive committee that tariff matters were in such shape as to 
need no further attention from the association, "it being under- 
stood that there would be no further agitation on the part of our 
members for the present." It was announced that the National 
Tariff Commission Association had signified its approval of the 
Tariff Board. 

One of the first matters to engage the attention of the executive 
committee of the National Implement & Vehicle Association in 
January, 1911, was reciprocity with Canada. The committee 
adopted a resolution favoring a decided reduction in the tariff on 
agricultural implements, vehicles, and allied lines imported into the 
United States from Canada, provided the Canadian Government 
would reduce its tariff to the same basis on like lines imported from 
the United States. The secretary of the association and the chair- 
man of the executive conunittee were instructed to prepare a resolu- 
tion on the subject and embody it in a letter to the President of the 
United States, and the secretary was directed to inform members 
and to urge them to write their Congressmen that proper attention 
be given the subject. 

During February, 1911, the secretary visited Washington in con- 
nection with the Canadian reciprocity agreement and appeared 
before the Committee on Ways and Means to communicate the ap- 
proval of the association. He reported his impressions of the situa- 
tion in a bulletin dated February 8. In it he also stated that, as the 
president of the association expected to be in Washington when the 
bill reached the United States Senate, the association would not 
only be ably represented, but also be kept well informed concerning 
the situation and be in position to respond to any call which might 
be made for assistance. On February 20, members were again 
recommended to write their Senators at once, urging them to sup- 
port the confirmation of the Canadian reciprocity agreement. The 
bulletin added: 

We appreciate the assistance you have already given, but 
another strong letter from you to your Senators may stir them 
to action, so please give it prompt attention and send us copy. 



->■ 



100 



FAKM-MACHINEKY TBADE ASSOCIATIONS. 



ACTIVITIES WITH RESPECT TO LEGISLATION. 



101 



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Before the Senate had ratified the reciprocity agreement, another 
bulletin to the same effect was sent out. This letter, dated May 2, 
also warned members that the issue might be befogged by a bill ^^ 
that had been introduced to place agricultural implements and farm 
wagons on the free list— a bill which the letter asserted to be purely 
a tariff matter having no connection with the reciprocity agreement. 
The work of the tariff committee of the association in 1911 was sum- 
marized in a report to the convention held at Chicago in October, 1911. 
In this report it was stated that the committee had deemed it advisable 
not to agitate the question of tariff revision during the preceding 
year. It was asserted that the failure of Canada to ratify the treaty 
of reciprocity that had been negotiated left the field open for sug- 
gestions of such tariff changes as would be of benefit to the members 
of the association. 

In March, 1912, the secretary advised members that special ar- 
rangements had been made at Washington to procure quickly and, 
without the usual delay in making requests of the various depart- 
ments, the latest and most complete information concerning foreign 
trade in which the members of the association were interested. 

From time to time the secretary of the National Implement & 
Vehicle Association has issued general bulletins advising members 
of changes in the tariff laws of foreign countries and of news of the 
export trade as shown in the consular reports of the Government. 

In the early part of 1912 the secretary wrote members for informa- 
tion regarding their export trade to Kussia to ascertain the effect of 
the abrogation of the treaty with Russia on the American implement 
trade stating: 

It is essential that business men give such matters as this and 
others not yet separated from political influence, more attention 
than they have m the past if we are to avoid the lo^ of our 
choicest opportunities through their political aspect or influence 
being made paramoimt. 
At the annual convention held in October, 1912, the committee on 
tariff reported that it had been deemed desirable to look into but one ^ 
question of great importance, namely, the Russian situation, as re- ' 

gards the possibility of a prohibitory tariff being placed on Ameri- 
can agricultural machinery as the result of differences growing out 
of the abrogation of the commercial treaty. A committee was ap- 
pointed to continue work at Washington necessai-y to bring about a 
friendly settlement of existing difficulties between the United States ^ 
and Russia, and it was recommended "that they should lose abso- 
lutely no time as the danger is certainly grave." A resolution was 
adopted urging the necessity of immediate action in the negotiation 
of a new treaty with Russia to avoid " terrific loss," and the secretary 
was directed to forward a copy of this resolution to all interested 



4 



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commercial bodies of this country and to asK their cooperation and 

support. 

The report of the tariff committee was chiefly devoted to the 
Russian situation. It said, in part, however: 

We did not deem it advisable to agitate nor to undertake to 
suggest in the matter of the revision of our tariff on steel, feeling 
that it is not within our power at this time, owing to the politi- 
cal situation and the further fact that there seems to exist such 
large differences of opinion on that question among our own 
members, and the further fact that the Government will un- 
doubtedly succeed in creating a tariff board, and the fact that 
if such a board is created it would give our association a direct 
body to work with, if in your judgment it was advisable. For 
the above reason we pass over that question. 

The convention adopted a resolution advocating " that all legisla- 
tion for the revision of protective tariff rates should be based upon 
actual changes in economic differences between American and foreign 
countries scientifically determined by a nonpartisan tariff commis- 
sion." Resolutions were also adopted approving the reorganization 
of the consular and diplomatic service, the maintenance of the service 
on a uniformly high standard of efficiency, and the adoption of meas- 
ures for the creation of an American merchant marine and favoring 
a bill making the owners of vessels liable for loss or damage of 
cargoes, etc. 

At the convention in October, 1913, the committee on foreign com- 
merce and tariff reported that a satisfactory settlement of the Russian 
tariff situation might be expected, but that implements manufactured 
in other foreign countries were gaining a strong foothold in Russia. 
The report of the committee also called attention to the prospect for 
trade for American implement manufacturers in various foreign 
countries. 

To assist members of the National Implement & Vehicle Associa- 
tion in extending their trade in foreign markets, a separate depart- 
ment, composed of the foreign-trade managers of various members of 
the association, was organized in April, 1914. The president of this 
department, at the annual convention of the association held the 
following October, stated that — 

Its object is to collect and distribute among our members 
general information on matters of export that will enable them 
to seek an increased trade among our foreign friends at the least 
possible expense. 

At the time this department was organized the following resolution 

was adopted: 

Resolved, That the members of this department cooperate in 
furnishing information relative to the foreign trade, to any rea- 
sonable extent, on request, and that copies of all inquiries and 
answers be filed with the secretary. 



102 



FARM-MACHINERY TRADE ASSOCIATIONS 



ACTIVITIES WITH RESPECT TO LEGISLATION. 



103 



Topics considered at the first meeting of the foreign-crade man- 
agers' department included the following: Quoting prices to the 
foreign trade, methods of handling Russian trade, foreign terms and 
credits, preparation of foreign-trade catalogues, and hindrances to 
agricultural development in the Argentine. In connection with the 
work of this department, it has been suggested that the association 
establish bureaus in countries where members wish to build up their 
trade, and also a bureau and showroom in New York City. 

Section!. Patent laws. 

A revision of the patent laws of the United States was advocated 
at the annual meeting of the National Association of Agricultural 
Implement & Vehicle Manufacturers in 1897, and an improvement of 
the patent system was urged at the convention held in 1898. A 
standing committee on patents appears to have been created for the 
first time in November, 1898. 

In 1907 the report of the committee on patents stated that, although 
it might be thought too great a task for the association to suggest modi- 
fications of the patent laws, it might be wise " to sow seeds " in order 
that the manufacturers might at some time reap the benefit. Accord- 
ingly the committee made certain suggestions which were later in- 
dorsed by the association. It opposed the extension of patents and the 
existence of patent-holding companies, and advocated that foreigners 
be subjected to the same requirements that foreign nations impose 
upon American inventors. In the administration of the patent law, 
it was recommended that greater care be observed in the issuance of 
patents and that the standard, as to the sufficiency of invention to 
warrant the issue of a patent, be raised. Furthermore, it was rec- 
ommended that a competent and adequate force of Patent Office 
employees be provided for; that abandoned applications be cited 
against new applications and be open to public inspection after a rea- 
sonable time ; and that an improved and more appropriate system of 
classification and indexing of patents be adopted. In January, 1908, 
the chairman of the committee on patents was authorized to appear 
before the House Committee on Patents to ask for legislation along 
the lines indorsed in those recommendations. 

In September, 1911, the secretary of the National Implement & 
Vehicle Association directed the attention of the members to three 
bills to modify the existing patent system which were considered 
inimical to patentees. One of these bills provided for the forfeiture 
of patent rights under certain conditions and the other two aimed 
at the adoption of a compulsory system for the manufacture of pat- 
ented articles under license. It was urged that if these latter bills 
should become law competitors could compel the owner of a patent 
to grant a license or shop-manufacturing privileges and thus destroy 



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the incentive to invention through the destruction of the patent 
monopoly. It was said : 

d^ These bills seem not only unconstitutional, but ridiculous, tor 

they destroy the very foundation upon which many great manu- 
facturing institutions are established * * *. We recom- 
mend that you immediately register vigorous protest with your 
Representative and Senators against these bills . We 

should not wait until the next session of Congress to make 
known our objections, but should stamp out at once this move- 
^ ment for compulsory patent license. 

At the convention held in October, 1911, the patent committee 

condemned the movement for compulsory patent licenses. Specific 

^ objections to these bills were pointed out, and members were urged 

to take a positive stand against their enactment and make their 

opposition known to Representatives and Senators. The committee 

% reported that for several years it had supported the movement to 

secure the establishment of a court of patent appeals, and that the 

need for such a court had become apparent by reason of conflicting 

decisions rendered by the various courts of appeal. A separate 

court of patent appeals was urged, and members were requested to 

^ make their wishes known to the President of the United States and 

% their Congressmen, when called upon to do so, for the enactment of 

a bill pending in Congress providing therefor. 

A resolution was adopted expressing the opposition of the asso- < 
ciation to giving authority to the Commissioner of Patents to grant 
licenses to other than the patentee to manufacture the patented 
article as proposed by a recent bill introduced in Congress. The 
• opposition of the association was also expressed to a provision con- 

tained in a Senate bill forfeiting a patent on terms and conditions 
therein provided. The association took the view that the rights of 
foreign patentees should be limited by the same rules and regulations 
,^ by which patentees of this country are limited in the country where 

the original patent was granted. 
A At a meeting of the executive committee held December 23, 1911, 

the committee on patents was requested to draft a bill requiring that 
all laws or treaties passed relative to patents be made on a reciprocal 
basis, and that the committee give special attention to pending legis- 
lation relative to patents and ask the cooperation of the conunittee on 
National legislation if necessary. 
m At the convention in 1912 the committee on patents reported that 

its work during the preceding year had been principally along the 
line of opposing legislation to revise the patent laws. It reported 
that the compulsory patent measure had been so vigorously opposed 
by this association and others that it was dropped, but the propa- 
ganda was later revived. It was asserted that the object of foreign 



% 



104 



FABM-MACHINEBY TRADE ASSOCIATIONS. 



countries in adopting compulsory license measures was "to stifle 
American inventors," and that it seemed incomprehensible that seri- 
ous consideration should be given to the adoption of a system that 
had been " primarily devised abroad to throttle American progress." 
It was stated that the revision of our patent law would have far- 
reaching effect and was a matter of too great importance to be under- 
taken hastily, and that the objections to the compulsory license 
system were so great that the committee urged that there be no 
cessation on the part of members in opposing such a measure. It 
added that, aside from this attempted revision of the patent laws, 
the patent situation had apparently been very satisfactory so far as 
the members of the National Implement & Vehicle Association were 
concerned. 

At this convention the association attorneys notified members that 
they had been informed that the patent committee of the House of 
Kepresentatives had a bill before it which declared that it should not 
be lawful to insert a condition in a contract relating to the sale, lease, 
or license of any patented article or process, the effect of which would 
be to prohibit or restrict the purchaser, lessee, or licensee from using 
any article or class of articles, and that it should not be lawful to 
insert in any contract a condition requiring the purchaser to acquire 
from the seller any article or class of articles not protected by the 
•patent. This situation was pointed out for the " serious considera- 
tion " of the members of the association. 

The convention adopted the following resolution: 

Whereas our patent laws have afforded inventors and owners 
of patents protection. 

Resolved^ That we continue our efforts in opposing any revi- 
sion of the patent laws which contemplates a compulsory license. 

In June, 1914, the patent committee of the National Implement & 
Vehicle Association decided to offer its services as mediator for the 
adjustment of any dispute among members of the association in 
regard to patents. 

Section 5. Industrial indemnity and indemnity insurance. 

So far as shown by the records of the various associations of im- 
plement and vehicle manufacturers, their activities in respect to labor 
matters have been devoted chiefly to the subject of employers' lia- 
bility or workmen's indemnity compensation, especially in respect to 
State legislation placing risks upon the employers. (See pp. 57 

wid 58.) 

One of the first matters taken up by the executive committee of the 
National Implement & Vehicle Association after the formation of 
that organization, in January, 1911, was industrial indemnity legis- 
lation. The National Association of Agricultural Implement & Ve- 



<r 



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ACTIVITIES WITH RESPECT TO LEGISLATION. 



105 



hide Manufacturers had provided for a committee on industrial 
indemnity and insurance shortly before this time, and a conference 
had been held at Columbus, Ohio, with members of a similar com- 
mittee acting for the National Association of Manufacturers. In 
March, 1911, it was decided that the National Implement & Vehicle 
Association should take an active interest in industrial indemnity 
and legislation on the subject pending in various States, cooperating 
with other organizations working toward the passage of fair and 
equitable laws. The secretary of the association was instructed to 
write each member of the committee on State legislation that in part 
his duties were to immediately ascertain from his representatives at 
the capital of his State just what bills or legislation were pending 
which would be of interest to him as a manufacturer. If inimical 
to his interest, he was requested to report the matter at once to the 
chairman of the committee on State legislation in order tha the asso- 
ciation might cooperate with him and with other commercial bodies 
in the State to secure the amending of such bills, so that they would 
be fair and equitable. 

The executive committee took immediate action on the industrial 
indemnity legislation then pending in Wisconsin and Illinois by in- 
structing the members of the State legislation committee in those 
States to immediately notify all the association members resident 
therein to name representatives who could act for them and be sub- 
ject to call if the chairman found it necessary to use a delegation. 
The members of the State legislation committee were also notified 
that the association expected them to get in touch with what was 
going on in their State legislatures of special interest to manufac- 
turers and report at once to the chairman of the committee with sug- 
gestions of what action should be taken. As much of the legislation 
then pending was considered by the manufacturers to be drastic and 
discriminatory, every member of the association was urged in self- 
protection to interest himself and send his views to the association 
office. It was advised that — 

It is not always possible to head off inimical laws, but by coop- 
erative organization it is possible to modify them, and these new 
industrial indemnity laws are of this character. 

The secretary of the association in his report to a meeting of the 
executive committee in June, 1911, stated that, if it had not been for 
the cooperation of the association in securing modifications in the 
terms of some of the industrial indemnity laws that had been passed, 
they would have been passed in a much more drastic form. He said 
that some of the committee members had sacrificed largely of their 
time and money in working for the modifications ; that in Wisconsin 
the bill had been much improved by the attention given and work 



VL.^^# 



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106 



FARM-MACHINEBY TKADE ASSOCIATIONS. 



done by certain members of the association in that State, and that in 
Ohio one of the members of the association had not only framed 
most of the provisions of the compensation law but had been of 
much service in securing its passage through both houses of the legis- 
lature. He reported that in Illinois the members of the association 
had given a larger proportion of time and attention to this question 
than was given by any other line of business. 

An advance in the rates of industrial indemnity insurance com- 
panies led to a suggestion in June, 1911, as to the possibility of creat- 
ine some plan of mutual insurance among the members. An effort 
was made to collect from the records of members reliable statistics 
for use in case it should be decided to organize a mutual industrial 
indemnity insurance company. No further steps seem to have been 
taken in this direction. 

Accident prevention and industrial indemnity laws received much 
attention at the annual meeting of the association in October, 1911. 
The report of the committee on industrial indemnity insurance 
suggested that the members of the association might imite with 
other manufacturers in their respective States to assist in securing 
the adoption of a fair and equitable law. The committee recom- 
mended that steps be taken to reduce accident risks at the factories 
of the members, and also suggested the interchange of information 
among members as to devices for safeguarding dangerous machinery. 
This report also called attention to the recommendation of the State 
legislative committee advocating more complete organization among 
manufacturers. (See p. 91.) The members of the association 
adopted resolutions favoring a national employers' liability law and 
expressing the sense of the association that it was far better to pre- 
vent accidents than to obtain low settlements after their occurrence. 
In this connection, the executive committee of the association was 
instructed to employ such methods as were deemed best to educate 
all members in thfe prevention of accidents. The committee en indus- 
trial indemnity insurance was also empowered to cooperate with 
committees of other organizations in safeguarding the interest of 
members in a reasonably uniform way. In 1912 the members 
adopted resolutions referring to employees' compensation legislation 
as a vital problem to be solved rather than to be resisted, and recom- 
mended legislation of a uniform and constructive character based 
upon a plan of making such compensation compulsory on employers 
and employees, the cost of administering the law to be borne by the 
Government, the fund to be contributed by employers and employees. 

Since 1912 the activities of the association in lespect to industrial 
indemnity legislation seem to have been based upon this recommenda- 
tion. Careful attention has also been given to the prevention of 
accidents. 



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ACTIVITIES WITH RESPECT TO LEGISLATION. 



107 



Section 6. Opposition to prison factory legislation. 

For some years the various associations of implement and vehicle 
manufacturers and dealers have opposed State legislation providing 
for the manufacture of binder twine and implements in prisons. The 
dealers have attacked proposed legislation on the ground that it is 
unjust discrimination against implement dealers; that it is unconsti- 
tutional and unprofitable for States to engage in manufacturing 
enterprises; that it tends to discourage invention, etc. They have 
opposed such legislation because the prison output has been generally 
sold directly to farmers at prices less than the prices at which dealers 
can sell goods made at factories employing free labor. Moreover, 
there has been little profit to dealers in handling the prison product 
since they have had to pay about the same price as paid by the farmer. 

It is claimed that the implement manufacturers' and dealers' asso- 
ciations have been successful in efforts to prevent or delay the passage 
of such legislation in several States. In other States, however, nota- 
bly in Minnesota, where the manufacturing operations have been 
conducted apparently with a considerable degree of success, such 
opposition seems to have had little effect. 

Until recently opposition to legislation authorizing prison manu- 
facturing operations has been less in evidence among the associa- 
tions of implement and vehicle manufacturers and jobbers' clubs than 
the dealers' associations. In July, 1910, however, the implement 
jobbers of Minneapolis appealed to the National Association of Agri- 
cultural Implement & Vehicle Manufacturers for financial aid and 
moral support in opposition to legislation which had been proposed 
in that State to authorize the manufacture of various kinds of har- 
vesting machinery at the State penitentiary, in addition to the manu- 
facture of binder twine, which had been carried on there for a num- 
ber of years. The Minneapolis jobbers advised the secretary of the 
National Association of Agricultural Implement & Vehicle Manu- 
facturers that if such legislation were enacted it would ruin the 
implement business in that State, and that in view of this fact the 
jobbers had investigated the possibilities of stopping the activities 
of the prison authorities by an action in the courts to have the manu- 
facture of implements in the penitentiary declared illegal. As the 
jobbers felt that the manufacturers would be as much affected as the 
jobbers, the latter felt that the members of the National Association 
of Agricultural Implement & Vehicle Manufacturers should bear a 
portion of the expense of such a suit. The executive committee 
of the National Association of Agricultural Implement & Vehicle 
Manufacturers directed the secretary of the association to get in touch 
with the parties interested, and assure them of the interest of the 
manufacturers' association in the matter. The committee also ex- 



ACTIVITIES WITH RESPECT TO LEGISLATION. 



109 



108 



FARM-MACHINERY TRADE ASSOCIATIONS. 



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pressed its opinion that steps should be taken by the association to 
secure the passage of a National law forbidding States to manufac- 
ture goods at penal institutions. 

In further correspondence with the Minneapolis jobbers, the lat- 
ter explained that during the three preceding sessions of the Minne- 
sota Legislature, the implement houses at Minneapolis had maintained 
a committee to fight the proposition, with only partial success, as the 
legislature had authorized the expenditure of a considerable sum 
of money to equip and operate a factory for buildmg binders, 
mowers, and hayrakes, and a number of experimental machines had 
been made in 1909. It was pointed out that, while the quantity made 
up to that time was not great, the prices asked by the State were so 
far below those that regular manufacturers and dealers had to ask 
that it was easy to see what the result would be when the output be- 
came larger. Furthermore, a strong effort was being made to have 
manure spreaders added to the line manufactured at the penitentiary. 
In regard to the legal action contemplated, the manufacturers' asso- 
ciation was advised that the plan had been outlined, makmg citizens 
of Minnesota parties to the suit, so that the manufacturers associa- 
tion was not expected to have anything to do with starting the 
action, but were asked to help in providing funds. The executive 
committee of the National Association of Agricultural Implement & 
Vehicle Manufacturers requested the attorney of that association to 
render an opinion on the constitutionality of the Minnesota law, and 
in doing so he reached the conclusion that the establishment of manu- 
f acturing operations was in conflict with the State constitution. 

Meantime a small number of manufacturers m Minnesota had 
formed an organization, known bs the Minnesota Manufacturers 
Association, to oppose legislation such as that authorizing the State 
to engage in the manufacture of manure spreaders. The board of 
directors of this association was largely composed of manufacturers 
and jobbers of implements and allied lines. The chairman was a 
member of the National Implement & Vehicle Association, and the 
treasurer was an official of an implement-manufacturing concern at 
Minneapolis, and also of the implement jobbers' club of Mmneapolis 
and St Paul. The secretary of this association wrote to the secretary 
of the National Implement & Vehicle Association, stating that a good 
man was needed at once and inquiring whether the manufacturers 
association could do anythmg in the matter. , «. ^r v.- i 

The executive committee of the National Implement & Vehicle 
Association appears to have become apprehensive concerning the 
possibilities of a great manufacturing enterprise being built up at 
the Minnesota State prison, believing that such an enterprise, if 
successful, would be likely to be copied in other States. At a meet- 
ing of that committee held at Kansas City in January, 1911, 









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the secretary of the association was instructed to investigate this 
proposition. In company with two Wisconsin manufacturers be- 
longing to the National Implement & Vehicle Association, he con- 
ferred with the manufacturers and jobbers in Minneapolis in regard 
to the proposed attack on the right of the State to engage in prison 
manufacturing. He reported, however, that he found the local 
manufacturers and jobbers had become indisposed to raise the issue 
on the items already manufactured at the prison, because they had 
been assured that the bill introduced to authorize the manufacture 
of wagons and manure spreaders would not be presented for pas- 
sage.^ Subsequently the Minneapolis wholesalers and manufactur- 
ers apparently made some unsuccessful efforts with the legislature 
to secure the adoption of some resolutions providing for the appoint- 
ment of a committee to investigate the manufacturing operations at 
the State penitentiary. 

In March, 1911, the secretary of the National Implement & 
Vehicle Association reported to the executive committee that it had 
been determined to look into the situation in Wisconsin, where build- 
ings had been built and machinery purchased for the prison manu- 
facture of twine. The chairman of the association's committee on 
State legislation had been instructed to secure an opinion of the 
constitutional right of the State to engage in manufacturing. The 
secretary of the association stated, however, that this opinion, which 
had been rendered by a prominent attorney of Milwaukee, did not 
take a sufficiently positive view against the constitutionality of the 
act to warrant the association in bringing suit. The secretary sug- 
gested that the association begin a campaign of education through 

» In connection with this reluctance of the local manufacturers and Jobbers to take up 
this matter, the comment of a representative of the National Implement & Vehicle Asso- 
ciation is interesting. In a letter to one of the manufacturers he intimated that this 
was probably due to " the feeling on their part that by allowing the continuance of the 
manufacture of binder twine they were hitting at a certain large concern which manu- 
factures a large quantity of that commodity." The comment of one of the prominent 
implement men in Minnesota is also of interest. He asserted that — 

there has already been a disposition on the part of the implement fraternity in this 
territory to avoid the undesirable notoriety which would necessarily follow the trial 
of such a case in the courts. There has been the ever present fear that the farmers 
would iumn at the conclusion that the Implement jobbers and manufacturers were all 
involved In some huge trade combination for the express purpose of defrauding the 
farmer or putting him at the mercy of the Implement manufacturers. In other 
words 'the gum-shoe policy has prevailed here in connection with this implement fac- 
tory proposition as well as in connection with the bhider twine proposition twenty-five 

^^As a^matter of fact, it was argued here that to oppose the establishment of a 
factorv in Stillwater for the manufacture of harvesting machinery, including binders, 
mowers and rakes, the Implement fraternity would lay themselves open to a charge 
of fighting the battles of the International harvester Co. On one side was the prison 
competition, on the other side the trust bugaboo. They ran away from the bugaboo 
and fell Into the arms of convict competition. . ,^ , . , *. t ^.u cs*.-*- 

I am of the opinion that the manufacture of agricultural Implements in the State 
Drtson will for many years to come be confined to harvesting machinery ; or, at least, 
to the class of machinery now made, namely— binders, mowers, and rakes. There is 
absolutely nothing, however, to prevent any future legislature from extending at 
win the list of gi>od8 to be manufactured. The only restraining Influence Is the 
fact that some other lines of Implements are made In Minnesota By free labor, and 
a strong argument In favor of making harvesting machinery with wnvict labor has 
been that It did not Interfere with any enterprise in this State employing free labor. 
It was for this reason we received only a lukewarm support from the labor dele- 
gates and the labor lobby m opposing the measure before the several legislatures. 



110 



FABM-MACHINEBY TBABE ASSOCIATIONS. 



the medium of farm-trade papers against what he termed the grow- 
ing tendency in agricultural States to engage in prison manufac- 
turing, especially in those products which affect the dealer-customers 
of the implement and vehicle manufacturers. He also referred to 
the appointment of a committee of the Western Betail Implement & 
Vehicle Dealers' Association to cooperate with the National Imple- 
ment & Vehicle Association in investigating the cost of manufac- 
turing binder twine at State prison plants, by which means he 
thought valuable data could be gathered for use to open the eyes of 
the farmers throughout the West, and also taxpayers, to the fact 
that few ventures of this sort have shown even paper profits. After 
some discussion on this report one of the members (who was himself 
interested in the manufacture of binder twine and cordage) offered 
a resolution instructing the secretary of the association to begin a 
campaign of education in States where the danger was most immi- 
nent, the work to be done in connection with the association's com- 
mittee on State legislation. At a later meeting of the executive 
committee of the National Implement & Vehicle Association, at which 
the secretary made a report on the situation in Wisconsin, the secre- 
tary and two Wisconsin members of the association were appointed 
to confer with the International Harvester Co. with power to act in 
the premises. Later, at a conference between this committee and a 
repiesentative of the International Harvester Co , it was decided that 
if any move was to be made it should be by a taxpayer in Wisconsin. 



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CHAPTER V. 

COHCEimiATIOlSr IN OWNERSHIP OF WIITO-STACKEE PATENTS. 

Section 1. Introduction. 

Efforts to maintain the price of goods of competing manufac- 
turers have not been entirely confined to the cooperative efforts of 
trade associations. The price-making conditions in the harvesting- 
machine branch of the industry have been already described in the 
Bureau's report on the International Harvester Co. In the thresher 
branch of the industry there exists a patent-holding company, which, 
through control of numerous patents relating to the stacking of 
straw and chaff by means of pneumatic blowers or wind stackers, 
fixes the price at which such stackers are sold by every manufacturer 
of threshing machinery. The patent-holding company is itself con- 
trolled by the managing directors of one of the largest threshing- 
machine companies. 

Section 2. Origin of the wind-stacker patents-license system. 

The first commercially successful device to carry away the straw 
and dust from a threshing-machine separator by means of an air 
blast was invented in the latter eighties by James Buchanan, of 
Indianapolis, Ind. He organized a company known as the Cyclone 
Co., to manufacture the stacker which could be attached to threshing 
machines made by the different manufacturers. Financing this com- 
pany and introducing its output was an expensive undertaking, and, 
although outside investors became interested, the capital of the 
Cyclone Co. was soon exhausted and at the close of the season of 1890 
it became financially embarrassed. A. A. McKain, also of Indian- 
apolis, who had become interested in the company, agreed to assume 
part of its indebtedness in return for territorial rights in the States 
east of the Mississippi Eiver and in Minnesota, North Dakota, and 
South Dakota. 

Buchanan immediately made application for a patent on the 
machine he had completed. McKain organized the Indiana Manu- 
facturing Co., under the laws of the State of Indiana,^ in the early 
part of 1891 and proceeded to make a number of stackers under 
Buchanan's invention and to attach them to different makes of sepa- 
rators. The manufacturers of threshing machines were obliged to 



1 The company was reincorporated in 1900 in West Virginia. 



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FABM-MACHIN£J1Y TBADE ASSOCIATIONS. 



send their separators to the factory in order that the wind stacker 
might be attached. The Indiana Manufacturing Co. thus began oper- 
ations as a manufacturing company, but early in the threshing season 
of 1892 the directors decided to grant licenses to the thresher manu- 
facturers, under which they should be able to make stackers them- 
selves upon payment of royalty. 

The first of these license contracts was made in October, 1892, 
with Gaar, Scott & Co., threshing-machine manufacturers at Rich- 
mond, Ind. Under this contract the licensee agreed to pay a royalty 
fee of $30 upon each wind stacker covered by the license, to furnish 
twice a year statements of stackers made and sold under the contract, 
and to allow the licensor to examine books and accounts concerning 
the manufacture and sale of stackers. Further, the licensee agreed 
to maintain a selling price of $250^ on time or $235 cash (except 
that agents should be allowed a discount not exceeding $25) and, 
in case of violation, to pay liquidated damages of $100 for each vio- 
lation. The licensee agreed not to dispute the letters patent cov- 
ered by the license contract nor to make their alleged invalidity a 
defense in any proceeding under the contract, or a ground of re- 
fusal to make payments called for thereunder. Under this contract, 
the licensor agreed, among other things, to give to the licensee the 
right to use all improvements, made by them, on the stacker de- 
scribed in the invention, without additional royalty fee. The licensor 
agreed further that, if more favorable terms were granted to any 
other licensee, Gaar, Scott & Co. should be entitled to receive them, 
and such modifications were to become a part of the contract. The 
licensor was given the right to cancel the contract on failure of the 
licensee to meet the payment of accruing royalties. In this contract 
specific mention was made of only two patents, namely, Buchanan's 

1 The manner in which the price of $250 was decided upon was explained in 1904 by the 
president of the company. In this connection, he said : 

The mounted stacker [the type of stacker generally in use when the wind stacker 
was introduced! was listed jienorally at $200. Its oporations required a short carrier 
which was generally listed by the manufacturers at $30 additional. The defendant 
company I believe at that time listed short carriers at $40. So that in establishing 
the price of the wind stacker at $250, as the short carrier was not necessary in any 
case where the wind stacker was used, the actual increase of price to the user was 
from $10 to $20, while the increased capacity for work enabled him in the beginning 
to get a cent extra [per bushel] for threshing wheat and a half cent extra for thresh- 
ing oats. But the extra amount threshed always enabled the operator to earn enouRh 
extra in the season to make his payments on the stacker, which were but $125 
annually for two years. 
He did not' explain the manner in which the price of $150 for wind stackers attached 
to clover hullers, corn shredders, and pea and bean threshers was determined. 

A brief filed in the Case suit by an attorney of the Indiana Manufacturing Co. in 
1905 alleged that it was admitted by the Case company that the selling price of $250 
furnished the manufacturer with a profit of at least $100. The general manager of the 
Case company testified that the shop cost of that company in manufacturing stackers 
was about $60 to $65. With the payment of the $30 royalty fee to the licensor and a 
commission of $25 to dealers, this would leave about $30 or $35 to cover the selling costs 
and general expenses of the licensee. In view of the alleged $100 profit on each stacker, 
it is perhaps hardly surprising that in testimony offered by several thresher manufac- 
turers in the Indiana-Case suit they concurred in expressing the opinion tliat $250 was a 
reasonable price to the consumer. 



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CONCENTKATION IN OWNERSHIP OF WIND-STACKER PATENTS. 113 

patents of 1884 and 1892. Before the end of 1893 nearly all the 
larger manufacturers of threshing machinery in the United States 
except the J. I. Case Threshing Machine Co. had taken out licenses. 
In negotiating these contracts, McKain, as president of the Indiana 
Manufacturing Co., seems to have held out as a chief inducement the 
fact that, as all licensees were required to maintain a uniform selling 
price of $250 and to make a fixed royalty payment of $30, all licensees 
would be assured of a substantial profit. 

In 1895 the Indiana Manufacturing Co. gave up the manufacture 
of stackers altogether, thereafter confining its business exclusively to 
the acquisition of patents, the issuance of license contracts, and the 
maintenance of its license system. To build up this license system 
had already become the principal object of the company. In 1892, 
arrangements had been made by McKain and three of his associates 
in the Indiana Manufacturing Co. to acquire the rights in the dis- 
tricts that had been reserved by the inventor, Buchanan. These 
rights were purchased for the payment of $10,000 per annum imtil 
the expiration of the patent. This agreement was assigned to a com- 
pany known as the Farmers' Friend Stacker Co., which was organized 
with a nominal capital of $50,000. By this arrangement the interests 
of the two companies were united, and in 1893 the Farmers' Friend 
Stacker Co. was merged with the Indiana Manufacturing Co. The 
Indiana Manufacturing Co. also began to acquire other patents 
relating to the wind stacker. Some were purchased outright, and 
in other cases arrangements were made to acquire manufacturing 
rights for the licensees. Some of these patents were acquired from 
licensees. To the Buchanan patents were added those of Nethery 
and of Landis, brought out in 1893 and 1894. At this time, or sub- 
sequently, were added the patents of Kirshman, Seburn, Springer, 
Bartholomew, Ross, Russell, Reeves, Robinson, Elward, and others. 
By 1895 more than 20 patents had been acquired, and in 1904 the 
number had risen to above 100, the cost of acquiring which is 
reported to have been approximately $600,000, in addition to royal- 
ties paid to patentees. The company sought to secure not only all 
patents of fundamental importance, but also those of a subsidiary 
character. The object of this was not only to strengthen its own 
position but also to avoid the possibility of vexatious litigation for 
itself and its licensees. Furthermore, control was secured of the 
Sattley Stacker Co., manufacturing slat stackers, which sold at a 
lower price than the wind stacker. The acquisition of this company, 
which licensed other manufacturers to make slat stackers under its 
patents, resulted in a diminished sale of slat stackers and an increase 
in the sale of wind stackers. (See footnote on p. 125.) 

68248°— 15 8 



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FARM-MACHINERY TRADE ASSOCIATIONS. 



Section 3. Gontroreny between the Indiana Mannfactnring Go. and the 
J. I. Gase ThresMng Machine Go. 

The payment of royalties to the Indiana Manufacturing Co., under 
its wind-stacker license system seems to have been especially dis- 
tasteful to the J. I. Case Threshing Machine Co. The operation of 
the wind stacker made necessary the use of engines larger than those 
which had been employed and threatened the use of the power- 
generating appliance, known as a horsepower, upon which the Case 
company owned some patents and had built up a profitable license and 
manufacturing business. The Case company entered into negotia- 
tions in 1892 to join with two other companies in purchasing the 
patents of the Indiana Manufacturing Co., but this plan was given 
up, and during the seasons of 1893 and 1894 that company stood 
almost alone among the principal thresher manufacturers in refusing 
to enter the license system. In April, 1895, however, a license con- 
tract was signed between the Indiana Manufacturing Co. and the 
Case company. After operating under this contract for a time 
a change took place in the ownership of the Case company, and the 
new owners complained that the wind stackers which they were 
making under the Nethery patents of the Indiana Manufacturing 
Co. were not giving satisfaction and that their company was sustain- 
ing heavy losses in attempting to market them. In 1898 the cata- 
logue of the Case company omitted all mention of wind stackers, and 
the company arranged to secure wind stackers absolutely necessary 
for its trade from another licensee of the Indiana Manufacturing Co. 
The Indiana Manufacturing Co. sought to induce the Case company 
to resume the manufacture of stackers under its license of 1895, but 
the Case company's attitude in November, 1898, and the reason alleged 
therefor, are shown in the following extract from a letter from its 
president to the president of the Indiana Manufacturing Co. : 

As you say, if the [Case] T. M. Co. should sell 1,500 wind 
stackers during the year 1899 they would be owing you under 
the terms of the written contract, $45,000, and we hasten to 
notify you that we shall not bear such a burden. If a wind 
stacker is a necessity to our customers we must manufacture one 
which will not infringe any of your patents. 

In the following month the president of the Indiana Manufactur- 
ing Co. had a conference with the Case company. He was told by 
the legal adviser for the Case company that the license contract was 
invalid and void, and by the directors that unless the Case com- 
pany's losses in trying to market the Nethery stacker — estimated at 
$170,000— were adjusted the Case company would undertake to make 
stackers independently of its license contract. No agreement was 
reached until a later conference between the same parties in January, 
1899. McKain then told the Case company that he admitted no just 



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CONCENTRATION IN OWNERSHIP OF WIND-STACKER PATENTS. 115 

claim on their part, but, in view of their power, and in order to 
secure harmony, he agreed to allow about $46,000 in settlement af 
their claims. This offer was accepted, and a supplementary contract 
was entered into, providing that the Case company should resume 
the manufacture and sale of stackers under its contract of 1895 and 
not question its validity for the future, and that royalties accruing 
each year to the Indiana Manufacturing Co. in excess of a fixed siun 
should be retained by the Case company, until the amount agreed 
upon had been fully paid. When the settlement of the business for 
the season of 1901 was made, the Case company received the last pay- 
ment due it under this contract. 

The license agreement entered into with the Case company in 1895 
contained substantially the same provisions that were included in 
the contract made with Gaar, Scott & Co. in 1892, and subsequently 
with other licensees. It, however, empowered the licensee to manu- 
facture, use, and sell wind stackers, embodying the claims of 21 
United States patents and two Canadian patents specifically named, 
as well as patents that might be issued on applications then pending, 
and a considerable number of patents for whose use the Indiana 
Manufacturing Co. had secured the right to grant sublicenses. It 
also provided that the term of contract should extend " until the full 
end of the term of any such patent, and any of the inventions of any 
of the aforesaid letters patent controlled by the said party of the 
first part [the Indiana Manufacturing Co.] by means of any license 
or agreement so long as the licenses or agreements relating thereto 
are of force, and any inventions which may be hereafter acquired by 
the party of the first part." 

While the right to manufacture, use, and sell wind stackers em- 
bodying inventions under subsequently acquired patents was not spe- 
cifically included in the earlier Gaar-Scott contract, it would seem to 
have been implied in the agreement to allow the latter the use of all 
improvements that the Indiana Manufacturing Co. might make on 
Buchanan's invention, and as favorable terms as those made to any 
other licensee. At any rate no controversy appears to have arisen 
over this matter.^ 

In August, 1902, the so-called Elward patent which had originally 
been issued in December, 1901, on an application filed in January, 
1893, was reissued. The inventor claimed that his patent was in- 
fringed by every wind stacker in use, and announced his purpose to 
compel the manufacturers of threshing machinery to pay him for its 
use. This announcement alarmed many of the licensees of the Indiana 

* Some licensees seem to have felt, however, that the Indiana Manufacturing Co., in 
purchasing patents from various licensees, might in some instances have paid amounts 
in excess of the real value of the patents so acquired, and thus have violated the agree- 
ment to give all licensees equal treatment. 



116 



FAKM-MACHINERY TBADE ASSOCIATIONa 



Manufacturing Co., and, accordingly, the president of the latter com- 
pany hastened to arrange to purchase the Elward patent for $100,000. 
The acquisition of this patent was made not only to protect the com- 
pany's licensees from the threatened attack of Elward, but also in 
pursuance of the policy of the Indiana company to acquire all desir- 
able patents relating to wind stackers. Furthermore, the dominating 
character of the Elward patent greatly strengthened the position A 
the Indiana company. In fact, it was considered only second in 
importance to the original Buchanan patent 

The ownership of the Elward patent also furnished a means by 
which the period of the license contracts might be extended beyond 
the expii-ation of the Buchanan patent in 1909. As already shown, 
the Case company contract of 1895 had contained a provision ex- 
tending its existence to the end of any of the patents therein men- 
tioned. The contracts then in force with other licensees provided 
that all should share alike in respect to any privilege granted to any 
licensee. On the whole it was thought best to enter into new contracts 
with all the licensees, giving them the right to use the Elward patent 
and others that might be acquired without the payment of additional 
royalty. By the new contract it was expressly agreed that this pro- 
vision should apply to any and all newly obtained or acquired patents 
and inventions and that the license should be in force until the end 
of the term of each and all of the patents mentioned. Barring 
unforeseen contingencies, this assured the Indiana Manufacturing 
Co. of the enjoyment of its royalties until the expiration of the 
Elward patent in 1918. Otherwise, its income might be seriously 
threatened after the expiration of the Buchanan patent in 1909. 

It should also be noted that the new form of license prepared at 
this time required orders for stackers to be taken separately from 
orders for other machinery. The purpose of this was to prevent 
concessions in the fixed selling price for stackers which might be 
concealed if the price were not shown as a distinct item. 

In the meantime F. L. Norton, then superintendent of agencies of 
the Case company, had perfected certain patents which he claimed 
would permit that company to manufacture wind stackers without 
infringing the patents of the Indiana company. When the treasurer 
of the Indiana Manufacturing Co. visited the Case company in 
March, 1902, Norton requested him to call the attention of the presi- 
dent of the Indiana Manufacturing Co. to these patents. The latter 
met Norton at Chicago in April, 1902, who told him that the Nor- 
ton wind stacker was not covered by any of the valid claims of the 
patents of the Indiana company. Much was said on both sides, but, 
after examination of the Norton patents, the patent attorney of the 
Indiana company reported that the Norton stacker was covered by 



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CONCENTRATION IN OWNERSHIP OF WIND-STACKER PATENTS. 117 

claims of several of the Indiana company's patents. He also re- 
ported that Norton had granted a shopright under his patents to 
the Case company, and that he wanted the sum of $250,000 for the 
title to his patents, for which he would accept the royalties accruing 
under the license contract between the two companies as his first 

payment. 

The president of the Indiana Manufacturing Co. testified subse- 
quently that when that company refused to buy these patents subject 
to the shopright in the Case company, it was informed that the 
supplemental contract of 1899, which the Case company had made 
to secure the payment of the damages claimed by reason of defects 
in the stackers it had manufactured under the Nethery patents, had 
now been fulfilled, and that, if the Indiana company should begin 
suit under the license contract between the two companies, the whole 
wind-stacker business would be broken up, and within 60 days wind 
stackers would be selling for $150. Notwithstanding this attitude, 
when the Case company refused to pay royalties for 1902 the Indiana 
Manufacturing Co. proceeded to bring suit. 

The bill of the Indiana company which was filed in the United 
States Circuit Court for the Eastern District of Wisconsin in April, 
1903, asked for an injunction against the infringement of the 
Buchanan patent of 1892 and four later patents by Landis and 
Nethery, or any use of them not in accord with the terms agreed 
upon, and for an accounting under its license contract with the Case 
company. The latter in its answer contended that there had been 
no infringement, and, even if there had been, the contract was not 
enforceable, for, if ever valid, it had been broken by the Indiana 
Manufacturing Co. in granting more favorable terms to other 
licensees;^ furthermore, that it was void from the beginning as a 
part of an illegal combination in restraint of trade. 

The decision of the circuit court, rendered August 22, 1906 (148 
Fed. Rep., 21), found that the Indiana Manufacturing Co. had con- 
federated with all the manufacturers of threshing machines in the 
country in a plan of uniform licenses under combined patents with 
a uniform price for the product. It held in "effect that the license 
system of the Indiana Manufacturing Co. extended beyond the 
monopoly intended to be created by the patent law in the beneficial 
use of specific inventions, and that the system was intended to create 
a further monopoly by combining patent rights in violation of the 
law. In the opinion of the court, the devices of all the patents of 
the Indiana Manufacturing Co. were not capable of conjoint use 
in a single machine — a number of them covering noninterfering de- 

^ Relying apparently on the different prices that had been paid certain other licensees 
for patents or for the right to manufacture under •them. 



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FARM-MACHINERY TRADE ASSOCIATIONS. 



vices performing the same fimctions and capable of independent 
use by different manufacturers. 

While this suit was pending on appeal in the circuit court of 
appeals, in the latter part of 1906, a crisis arose in the affairs of the 
Indiana Manufacturing Co. The president of the company, who 
was one of its largest stockholders, had pledged his shares as col- 
lateral for loans for investment in other enterprises, which had 
proved unsuccessful. The Indiana Manufacturing Co. was heavily 
in debt, and the litigation with the Case company had involved much 
expense. Trustees who had been appointed to manage the personal 
affairs of the president of the company were also appointed, in 
March, 1907, as an executive' committee to exercise the duties of the 
directors in managing the affairs of the company. The president of 
the company consented to a sale of his shares of stock, and the vice 
president of the company, Theophilus King, who was one of the 
president's personal trustees and a member of the executive com- 
mittee, was authorized to sell these shares. During the spring of 
1907 King visited the office of the Case company and offered the 
shares at $55, but this offer was refused, Norton, of the Case com- 
pany, taking the position that as soon as the Buchanan patent ex- 
pircKl in 1909 the Case company could do all its own business under 
the Norton patents and not be obliged to pay royalty to the Indiana 
Manufacturing Co. As King made no headway, he at once began 
negotiations with a committee of different thresher manufacturers 
and gave them an option to purchase the stock at $40 per share. 

In an opinion filed in April, 1907 (154 Fed. Rep., 365), the Ckcuit 
Court of Appeals for the Seventh Circuit reversed the decision of the 
circuit court referred to above. In the view of the court of appeals 
the license contracts, in requiring the licensees to maintain a uniform 
selling price, were not in violation of the law. The contentions that 
the Indiana Manufacturing Co. had itself first violated the contract 
and that there was no infringement were both found to be un- 
sustained by the evidence. The court therefore reversed the decree 
of the lower court, and directed that a decree be entered in favor of 
the Indiana Manufacturing Co., in accordance with the prayer of the 
bill of complaint. It was said that, in permitting a customer to get 
a stacker as a part of the separator of his choice, rather than con- 
fining the use of stacker patents to a single manufacturer, the Indiana 
Manufacturing Co. had given the public something beyond the power 
of the latter to demand. The opinion did not regard the patents 
sued on as competing patents. The concurrence of one of the judges 
in the result was based upon the view that — 

The patents as an entirety, therefore, constitute a single me- 
chanical evolution — are Wossoms from the same trunk — and in 



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CONCENTRATION IN OWNERSHIP OF WIND-STACKER PATENTS. 119 

no sense are competitive patents; from which it follows that 
their concentration in one control is in no sense a combination to 
prevent competition. 
A petition for a writ of certiorari was then filed in the Supreme 
Court of the United States. 

Section 4. Result of settlement with the Case company. 

Shortly after the decision adverse to the Case company in the 
circuit court of appeals, Frank K. Bull, president of the Case com- 
pany, reopened negotiations with officers of the Indiana Manufactur- 
ing Co., intimating that he might be able to organize a syndicate to 
purchase a controlling interest in the stock of the latter company. 
Up to this time the negotiations appear to have been only for the 
sale of the stock owned by the president of the Indiana company, 
whose holdings fell considerably short of a majority of the shares. 

During the negotiations for control of the Indiana Manufacturing 
Co. which followed, it is claimed that no discussion took place regard- 
ing the settlement of the litigation which was pending in the Supreme 
Court of the United States, awaiting a decision of that court on the 
petition to grant a writ of certiorari. The brief which had been filed 
in support of the petition by the attorneys of the Case company 
sought to show that the Indiana Manufacturing Co. really held not 
merely a patent monopoly authorized by the patent law, but that it 
really amounted to a monopoly of competing patents covering the 
whole wind-stacker industry, and that, therefore, the company had 
effected an illegal combination in restraint of trade, even if the license 
contracts were valid when based upon a single patent. This raised 
the question whether numerous patents, pertaining to a given indus- 
try, including those of different inventors, might lawfully be brought 
under a single control to deprive the public of the benefits of com- 
petition which they would otherwise enjoy. 

The decision in the circuit court of appeals had been favorable to 
the Indiana Manufacturing Co., but the contest had proved a severe 
strain upon its resources, and it was on the verge of bankruptcy. The 
prospect of further expense necessarily involved in continuing the suit 
in the Supreme Court, and the uncertainty as to what action that 
court might take in regard to the petition before it, must have been 
matters of serious concern to both parties. If the petition for the 
writ was granted, the Indiana Manufacturing Co. faced the possibil- 
ity of an adverse decree, which might end its existence, while, on the 
other hand, the Case company was confronted, not only with being 
obliged to pay over the sum of $235,000 on accrued royalties that had 
been paid into court pending final adjudication, but also of continu- 
ing the payment of royalties on future business. The Supreme Court 
granted the petition to file the writ on October 21, 1907 (207 U. S., 



ill 
II 



1 



120 



tARM-MACHINERY TBADE ASSOCIATIONS. 



587), but 12 days earlier, on October 9, an agreement was reached 
between officers of the Indiana Manufacturing Co. and directors of 
the Case company by which the latter purchased a majority ^ of the 
shares of the Indiana Manufacturing Co.'s stock, the total issue being 
15,000 shares. By this purchase, however, it must have been obvious 
to the buyers, who already owned nearly all of the capital stock of 
the Case company, that if the litigation were continued their inter- 
ests would be protected, whatever its outcome might be. Moreover, 
if the litigation were settled, it would allow the purchasers to par- 
ticipate in the profits from the royalties accruing from all the differ- 
ent licensees of the Indiana company, including the $235,000 of 
accrued royalties that had been paid into court by the Case company. 

The first payment for the stock to be transferred was made on 
October 9, the money being furnished by a Wisconsin bank on the 
joint note of the purchasers. It was agreed that until the purchase 
price was paid the Union Trust Co., of Indianapolis, should vote 
the stock as it might be requested to by a trustee acting in behalf 
of the purchasers and a trustee acting in behalf of the sellers, the 
sellers and purchasers agreeing that the existing executive conmiittee 
of the Indiana Manufacturing Co. should be continued imtil the 
stock was paid for by the purchasers, vacancies in this committee to 
be filled by persons designated by the Union Trust Co. 

Considerable secrecy was thrown about the purchase of the shares, 
the reason subsequently alleged being that confusion in the minds of 
competitors of the Case company in distinguishing between the 
directors as individuals and the Case company as a corporation 
might lead to a material reduction in the earnings of the Indiana 
Manufacturing Co. Later, officers of the Indiana Manufacturing 
Co. testified that at the time they were not aware of the personnel 
of the syndicate, although they understood that the Case associates 
constituted at least a part of the syndicate. Pending full payment 
on the stock no transfer of shares was to be made on the books of the 
Indiana Manufacturing Co. Meantime the shares were to be de- 
posited in escrow with the Union Trust Co., of Indianapolis. It was 
understood that the depositing stockholders should not part with 
control until completion of the payments. Furthermore, the pur- 
chasers caused a sealed envelope to be deposited, containing instnic- 
tions as to the parties to whom the stock should be distributed when 
it should finally be delivered. Even the trustee who was appointed 
to look after the interest of the purchasers in the transaction of pur- 
chase was not informed regarding the personnel of the syndicate. 

^ Im tills connectioii, the president of the Case company, who was one of the pnrchasers, 
has testUled, as follows: 

We wanted to control the company. • • • We bought the stock for an in- 
vestment. If we put in the amount of money that we put in as an investment we 
would want control. That la exactly the condition we made on a former tentative 
offer for the stock. 



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CONCENTRATION IN OWNERSHIP OF WIND-STACKER PATENTS. 121 

Shortly after the first payment was made on the stock that had 
been deposited, a change took place in the ownership of the Norton 
patents by which Norton transferred an equal interest to each of the 
purchasers, Norton himself being given an opportunity to partici- 
pate in the purchase of the shares, of the Indiana company. These 
arrangements were made as part of one transaction. Up to this time 
King had unsuccessfully endeavored to acquire the Norton patents 
for the Indiana Manufacturing Co. King had been instructed by 
the executive committee of the Indiana Manufacturing Co. on No- 
vember 21, 1907, to settle the suit with the Case company, to take 
down the royalties that had accrued in court, and to pay one-half 
of this amount to the Indiana Manufacturing Co. and a sum equal 
to the other half for the purchase of the Norton patents and those 
which Norton might thereafter acquire down to the end of the 
Elward patent. The agreement between the two companies provided 
that the accrued royalties in the possession of the court should be 
deposited with the American Trust and Savings Bank, of Chicago, 
one-half of the amount to be paid to the Indiana Manufacturing Co. 
and the other half to C. H. Lee, trustee of the Norton patents. It 
was also provided that a new license contract should be entered into 
which Norton might thereafter acquire down to the end of the 
Elward patent, the Case company also transferring its shopright in 
the Norton patents, on which it was to be allowed a royalty of $5 
upon each stacker it made. It was further agreed that the suit in 
the Supreme Court should be withdrawn and discontinued. 

The making of the new license contract with the Case company, 
the settlement of the litigation, the purchase of the Norton patents, 
and the transfer of the shopright of the Case company under those 
patents were finally completed early in December, 1907, all at one 
time, but as distinct transactions. Norton insisted that the purchase 
money for his patents should not come into the hands of the Indiana 
Manufacturing Co., partly perhaps because that company was largely 
in debt and had been kept out of the hands of a receiver only oy 
reason of loans that had been advanced by King. 

Shortly after these agreements were signed the Case associates, 
on December 9, anticipated the second payment on their shares, the 
money which had been paid for the Norton patents being used for 
this purpose. The final payment was made in November, 1908, after 
which the stock was delivered to the Wisconsin Trust Co., of Mil- 
waukee, in whose hands it apparently remained as security for pur- 
chase money advanced until April, 1910, when the shares were dis- 
tributed to the new owners. Meantime, Norton had become a director 
of the Indiana Manufacturing Co., in March, 1909. Subsequently, 
one of the Case associates testified that the purchasers expected to 
have no voice in the management of the Indiana Manufacturing Co. 



122 



FABM-MACHINERY TRADE ASSOCIATIONS. 



until the shares were fully paid for. He testified that the executive 
committee was to continue in charge meantime. He denied, how- 
ever, that this arrangement was made so that in the event of a settle- 
ment of the litigation it might have the appearance of being handled 
by some one other than the purchasers. 

It is claimed that the Case company advanced none of the pur- 
chase money for the shares, either directly or indirectly, and did not 
have the slightest interest in that transaction. 

At the request of counsel, the proceedings in the Supreme Court 
were dismissed on December 16, 1907 (207 U. S., 603), and in Janu- 
ary, 1908, the circuit court entered the decree which had been ordered 
by the circuit court of appeals in favor of the Indiana Manufac- 
turing Co. 

The acquisition of control of the Indiana company by the Case 
associates, and the concession by which the Case company was to be 
allowed a royalty of $5 on each stacker under the patents of the 
Indiana Manufacturing Co., caused unrest and dissatisfaction among 
other licensees of the latter company. Moreover, many of them felt 
that the payment of a large sirni for the Norton patents, even if 
paid to the Case associates as individuals, was merely a colorable 
transaction to conceal a rebate to the Case company of one-half of 
the royalties that had accrued. Under the contract each licensee was 
entitled to equal treatment with every other licensee. To fulfill this 
agreement, and probably to prevent the possible recurrence of any 
accusation of the grant of unwarranted rebates under the licenses 
that might arise in the purchase of patents from licensees, the Indi- 
ana Manufacturing Co., in 1908, submitted a supplemental contract 
to each licensee, known as the patents purchase agreement ^ (Exhibit 
21, p. 304), by which it was agreed that any licensee who would agree 
to turn over to the Indiana Manufacturing Co. all patents which he 
might own or acquire during the term of the license contract, would 

»At a meeting of the stockholders of the Indiana Manufacturing Co., held Mar. 31, 
1909, the chairman explained the reason for the adoption of the patents purchase agree- 
ment. His explanation is recorded in the minutes of the meeting, as follows : 

On account of the expiration of the Buchanan patent there were more or less dis- 
turbed conditions amongst our licensees; that there had been a suggestion that when 
the Buchanan patent expired that possibly tbe royalties would be reduced and while 
it was nothing more than a suggestion, it was thought best to meet this situation 
if possib{«e, and at the same time secure for the company a return that would aid in 
making our future as certain and sure as possible, and out of these negotiations 
with our licensees came what we call our ** patents purchase agreement " which con- 
templates the turning over to us by any licensee who signs it all the patents p«>r- 
taining to wind stackers which it may have at the time or which it may invent or 
acquire In the future : and for this consideration we pay for each stacker made 
during each year $5 where it is applied to threshing machines and $8) where it is 
appii^ to clover hullers, corn buskers, or pea or bean threshers. After a great deal 
of negotiation the majority of our licensees accepted this patents purchase agree- 
ment and we now have 41 such contracts with various licensees. There are some 
7 licensees who have not signed this contract ; 3 of the 7 while refusing to sign It 
have paid their royalties in full ; 4 concerns refused to sign it alleging one thing or 
another. They also have up to this time refused to pay their royalties. Suit has 
been brought against the Nichols A Shopard Co., the concern owing us the largest 
amount ; M. Riimely Co.. l*ort Huron Engine & Thresher Co. and Minneapolis 
Threshing Machine Co. are the other three concerns who have refused to make pay- 
ment of their royalties and after some further negotiations with them if they still 
refuse to pay. suit will be commenced against them. 



A 






CONCENTRATION IN OWNERSHIP OF WIND-STACKER PATENTS. 123 

be allowed the sum of $6 on each stacker manufactured by him as 
licensee of the Indiana company. This extended to all licensees 
who were willing to agree thereto, the same advantage that had 
been given the Case company under its agreement to turn over its 
shopright in the Norton patents and other patents which it might 
acquire. The great advantage to the Indiana Manufacturing Co. 
in this arrangement lay in the fact that it promised to vest in that 
company the ownership of new inventions as soon as they were 
patented. It was not impossible, moreover, that among such patents 
there might be included some of fundamental importance and some 
that might be used to compete with others already in the hands of 
the Indiana Manufacturing Co. The advantage to licensees lay in 
the reduction of rate of the royalty payment under the license con- 
tract and in the further advantage that any patent thus acquired 
by the Indiana Manufacturing Co. could be used by each of the 
licensees. Finally, it promised to perpetuate the license system and 
profits of company so long as it should hold any patent in general 
demand among threshing-machine manufacturers. 

Some of the dissatisfied licensees of the Indiana Manufacturing 
Co. refused to enter into the supplemental agreement for the transfer 
of their patents to the Indiana Manufacturing Co. Furthermore, 
some of them looked upon the royalty fee of $30 as unreasonable. 
The important Buchanan patent was about to expire, and, in Janu- 
ary, 1909, five of the licensees refused to pay the royalties due at 
that time for the use of the Indiana Manufacturing Co.'s patents 
during 1908. The disputes with these licensees resulted in the in- 
stitution of five suits at law against them by the Indiana company 
to recover the license fees. One of these companies settled in full for 
1908, but in January, 1910, refused to pay royalties for 1909, and suit 
was then started against it. Suits in equity were also filed against 
two of the same licensees to enjoin them from infringing the patents 
of the Indiana company and from violation of the conditions at- 
tached to their use of the company's patents as fixed by their license 
contracts. Practically the same questions were raised in all these 
cases. The licensees set up the defense that the license contract was 
in illegal restraint of trade and in violation of the Federal and State 
antitrust laws ; ^ that the Indiana Manufacturing Co. had given better 

* In this connection, the answer of one of the defendants read, In part, as follows : 

The said contract [the license contract] ♦ • • was and is ♦ * * an 
illegal contract In restraint of trade or commerce among the several States and 
with foreign nations, and was one of numerous similar contracts simultaneously 
entered into by substantially all the manufacturers and dealers in pneumatic stackers 
in the United States, all of whom were and are engaged in commerce among the 
several States including them, it having been a part of the mutual agreement when it 
was executed that it should only take effect and become operative when similar 
contracts were executed by substantially all those engaged in the business to which 
it relates among and throughout the United States, that Is to say, the business of 
manufacturing and selling pneumatic straw stackers, this contract and similar ones 
executed by substantially all those engaged in such business in the United States 
and among the several States having been devised and procured by complainant in 



124 



FARM-MACHINEBY TBADE ASSOCIATIONS. 



terms to other licensees by way of alleged rebate or other conces- 
sions in violation of a provision of the license contract (the transac- 
tions with the J. I. Case Threshing Machine Co. being specifically 
referred to, as well as certain alleged concessions to the International 
Harvester Co. of America, the Avery Manufacturing Co., and others, 
by way of the purchase of patents), and that better terms had been 
given to certain licensees in the making of the patents purchase 
agreements which were claimed to be illegal and void. Furthermore, 
the violation of a law of the State of Indiana requiring the filing 
of copies of patents with certain affidavits when such patents were 
sold, was alleged. The court sustained the plaintiff's demurrer to 
each of the paragraphs of the defendant's answer except that alleg- 
ing the grant of better terms to other licensees by way of the pur- 
chase of patents. The court ruled that to make such transactions 
with other licensees a violation of the license agreement the plead- 
ing must show that such transactions were fraudulently made, for 
the purpose of giving concessions amounting to a reduction in the 
royalty. The answer of the defendant, however, did not allege fraud. 

None of the cases came to an actual trial in court, although deposi- 
tions of the officers of the Indiana Manufacturing Co. and of the 
Case company were taken, under an agreement that all the deposi- 
tions could be used in all the suits. The suits were settled by the 
respective licensees paying up all royalties in full, each of them, 
however, making a new license agreement in the form shown as 
Exhibit 20, on page 299, and also becoming parties to the patents pur- 
chase agreement. Thereupon the cases were dismissed. 

In the settlement of these disputes a concession was made in allow- 
ing the licensees a discount of $3 on each stacker from the stipulated 
terms for cash payment of royalties. Accordingly, a general letter 
was sent to all licensees notifying them that under the terms of their 



nnrsuance to a combination and conspiraCT for the purpose of establishing and 
maintaining a monopoly in said business, and only delivered to become effective when 
Sitered into by a sufficient number thereof to establish and maintain such monopoly 
throughout the United States Irrespective of the validity and legal effect of any 
natente that might remain In force after the expiration of the said Buchanan patent; 
Sit^mDlainaEt and its predecessor in business The Farmer's Friend Company. 
^wi &7 about ten years, prior to the execution of the said contract, the owners of 
S^^hove m?ntlon^ sSaSan patent of January 19, 1892, and a patent to the same 
BuohaSIn for improvements In straw-stacking machines issued April 29. 1884. 
Na 297 561 whch patents together, if valid to the full extent of their terms, would, 
- «T?J:2r «nd iiftRir oatents secure while in force, a lawful monopoly in the pneu- 
5f«Rc 8ttck??lrt^but^he expiSn of which would throw this art open to practical 
^mmlrVui roiJoetition a consequent large reduction in the selling price 

♦S?.T^f f thP m^onoDolv were not extended by contract between the principal manu- 
l^®5^^I;i'«f n^n^Jffic^aSere In the United States; that when the inventions 
in^rSfrtine to^be c^?^^^^^^ Buchanan patents accrued to the public by ooera- 

R^T^f law it became practicable for the various manufacturers, without in^ing- 
JiJ^anv^ldpateXtS make and market successful pneumatic stackers, serving 
i?if«it -nthP nurooses required of such stackers, and to sell them at a reasonable 

SLitP'lt* «« MuSf to pe%et?are sa^C monopolj .ftS the patents on which It 

ffiMrSiSM-o?sSt.?en^«s? '^-sjisiof <sf '^rBuThSS 

patents. 



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CONCENTRATION IN OWNERSHIP OF WIND-STACKER PATENTS. 125 

contracts they would be entitled id this discount in making settle- 
ment on stackers made and sold during 1911. They were also noti- 
fied that in the settlement of disputes with the licensees in question 
the latter had been given the right to cancel the license agreement at 
the expiration of the Elward patent, in December, 1918, or to con- 
tinue it until the full end of the terms of each and all of the patents 
recited in the contract as owned by the licensor, or any reissues 
thereof, or for such shorter period as the licensee might elect, upon 
the terms of the license contract, or such terms as might be mutually 
agreed upon. The various licensees were requested to signify their 
acceptance of these offers. These provisions are included in the form 
of license contract now employed by the Indiana Manufacturing Co., 
a copy of which is shown as Exhibit 20, on page 299. 

Section 5. Significance of the patents license system. 

The purpose of the Indiana Manufacturing Co. to acquire com- 
plete domination over the wind-stacker feature of the thresher busi*- 
ness is shown in its aggressive efforts to acquire all desirable patents 
relating thereto. Such a policy was necessary to prevent litigation 
and maintain the integrity of its license system. At the present time 
the company owns or controls about 170 distinct United States letters 
patent, including virtually all those essential to the operation of a 
commercially successful wind stacker. In other w ords, it has secured 
practical control of the patents in this line. Furthermore, its posi- 
tion is strengthened by its control of the Sattley Stacker Co.^ 

The control of the fundamental Buchanan patent in the hands of 
the Indiana Manufacturing Co. undoubtedly precluded an effective 
concentration of wind-stacker patents in other hands. Thresher 
manufacturers early became convinced of the absolute necessity for 
securing the right to manufacture imder the Buchanan patent. The 

iThe reasons for acquiring the patents controlled by the Sattley Stacker Co. were 
explained by the former president of the Indiana Manufacturing Co. as follows : 

The Sattley stacker, while being of the same general construction of other endless 
apron carriers and stackers, was an Improvement upon them to the extent that It 
was attached to the separator and not on separate trucks, and consequently not 
subject to alignment in setting; It also had enclosed sides and top so as to prevent 
the straw from blowing away while In operation, and it was manufactured by a 
wealthy corporation, who, in their advertisements, were taking advantage of the 
oreiudice still remaining among farmers and threshermen who were not well dls- 
Dosed or unacquainted with the merits of the wind stacker proper, by advertising In 
^ade publications and otherwise, " Don't blow your money away " — intimating that 
the wind stacker was wasting grain. It, by catering to the prejudice, was retard- 
ing the general use of the wind stacker and costing the Indiana Manufacturing 
Company about $30,000 or $35,000 a year to combat it. It was also sold at a 
lower price which was elastic, and the commission to agents or dealers was set at 
S40- whereas the agent or dealer in selling wind stackers received but $25. This 
condition induced many dealers to talk the Sattley stacker, and sell It to customers 
who would otherwise have bought wind stackers. When, therefore, the owners of 
the patents came to us and offered to put the commission at $25 and establish a 
uniform price of $200 for their stacker, we thought the saving of the expense and 
advertising, and compelling the stacker to be sold on Its merits, and not through 
oreiudice, and removing the inducement for agents to give It the preference over 
the wind stacker, were sufficient reasons to induce us to make the arrangement We 
thought it would result In the diminished sale of the Sattley stacker and it had 
that result; the result being that the sale of Sattley stackers was failing off and 
tlia iale of wind stackera Increasing from year to year. 



, * 



126 



FARM-MACHINEBY TRADE ASSOCIATIONS. 



It 



acquisition of the Elward patent by the Indiana company rendered 
its position still more secure. Under such conditions it is not strange 
that the control of other patents passed to the Indiana Manufac- 
turing Co. 

A question of great public interest raised by the wind-stacker 
patent situation has already been mentioned, namely, whether this 
monopoly of patents is lawful; that is, whether it transcends the 
monopoly in regard to specific patents, which the patent law was 
intended to create. The case of the Indiana Manufacturing Co. 
presents some phases distinct from the case that would exist if its 
patents were vested in a single threshing-machine company which 
refused to license its competitors. Although controlled through 
stock ownership by the managing directors of the J. I. Case Thresh- 
ing Machine Co., the Indiana Manufacturing Co. itself is not now a 
manufacturing company; it is purely a patent-holding company, 
whose business relates almost solely to the sale of the right to manu- 
facture under its patents. It is claimed that the right is open to any 
thresher manufacturer who agrees to the tei-ms of the license contract, 
including the agreement to maintain a fixed selling price. It is not 
shown that any thresher manufacturer who applies for a license con- 
tract is required to also execute one of the patents purchase agree- 
ments, but it is clear that if he does so he is allowed a reduction in 
the royalty rate under that contract. It is also clear that the patents 
purchase agreements tend to strengthen the monopoly of the Indiana 
Manufacturing Co. In this connection, it should be pointed out that 
the profitableness of the business of the Indiana Manufacturing Co. 
depends upon its ability to control some patent fundamentally neces- 
sary for the successful operation of a wind stacker. The Buchanan 
patent was of this character and the same is true of the Elward 
patent. 

In view of recent decisions of the courts, it is also a fair question 
as to whether the agreement of the licensees to maintain a imiform 
selling price is lawful. If, as indicated in the footnote on pages 123- 
124, the continuation of the license system after the expiration of the 
Buchanan patent was due largely to an agreement among the 
thresher manufacturers themselves, it would appear that such action 
was unlawful. At any rate because of the concentration of patents 
in the hands of the Indiana Manufacturing Co., and the agreement 
to maintain prices, it is obvious that the public may be deprived of 
the benefit of lower prices that would naturally follow from the com- 
petition of diflferent manufacturers producing noninfringing devices. 

A further phase of the situation remains to be considered, namely, 
the significance of the control of the Indiana Manufacturing Co. 
itself by the managing directors of the J. I. Case Threshing 
Machine Co. This fact virtually places the control of the wind- 



< 



4 I f 



CONCENTRATION IN OWNERSHIP OF WIND-STACKER PATENTS. 127 

stacker patent monopoly in the hands of the Case company, although 
it should be pointed out that this ownership has not produced any 
noticeable change in the policy of the Indiana Manufacturing Co. 
toward other licensees or the public. It is hardly probable, how- 
ever, that the new stockholders would attempt to deprive licensees 
competing with the Case company of their rights under their license 
contracts, or that they would avail themselves of the power to refuse 
to enter into a license contract with new companies that might 
attempt to enter the thresher trade. 

Attention should be called, however, to the fact that each licensee 
in its royalty report to the Indiana Manufacturing Co. is required to 
furnish a list of the names and addresses of those to whom they have 
sold wind stackers. (See Exhibit 22, p. 305.) This requirement 
probably originated in the effort of the Indiana Manufacturing Co. 
to prevent the sale of wind stackers directly to users at reduced prices 
by allowing them the agent's commission. Having the name and 
address, it was comparatively easy for the Indiana Manufacturing 
Co. to determine whether the customer was entitled to an agent's 
commission, and, if not, to call the licensee to account for failure to 
maintain the selling price fixed by the license agreement. With the 
transfer of control of the Indiana Manufacturing Co. this informa- 
tion apparently became available to the directors of the Case com- 
pany, who could thus secure information regarding the business of 
their competitors which none of the latter would be likely volun- 
tarily to place at the disposal either of the Case company or its 

directors. 

Finally, one of the principal results of the acquisition of control 
of the Indiana Manufacturing Co. by the directors of the Case com- 
pany was to deprive the public of any benefit that might have come 
from a decision by the United States Supreme Court in the suits 
between these companies on the question as to whether the concentra- 
tion of patents relating to a particular branch of the mechanical 
arts transcends the rights of patentees as a combination in restraint 
of trade, and whether the Indiana Manufacturing Co. is within its 
rights in requiring its licensees to maintain uniform sale prices to 
users. It should be noted, moreover, that the patents purchase agree- 
ment had not been devised at the time that the Case suit was brought, 
and consequently the court was not called upon to determine the 
legality of this method of inducing the various licensees to pool their 
patents by transferring them to the Indiana Manufacturing Co. 



^ 



BESTRIOTION OF BETAIL TBADB TO BETAIL DBALEBS. 



129 



CHAPTER VI. 

EESTRiCTioir OF eetah trade to RETAH BEAIERS. 

Section 1. Introdnction. 

The dealers' claim to the retail trade. — ^The federated asso- 
ciations of implement and vehicle dealers assert that manufacturers 
and wholesalers who sell through retail dealers should confine their 
sales to that channel of distribution. Their position is summed 
up in the claim that " to the retail dealer belongs the retail trade." 
They assert that it is not fair for any manufacturer or jobber who 
sells through dealers also to sell by any other method of distribution 
which threatens to impair or destroy the trade of their dealer- 
customers, who have invested their capital in the manufacturers' 
goods for the purposes of resale. 

The forms of distribution to which these retailers' associations 
are especially opposed are sales directly to farmers and sales through 
irregular dealers. In this connection they object to the sale of 
goods through farmers' cooperative stores or through branch retail 
stores controlled by the manufacturer. They believe that manu- 
facturers and wholesalers who seek the trade of dealers should not 
furnish a supply of goods to mail-order houses, and they have been 
engaged in a constant struggle to devise means by which to minimize 
the competition of the mail-order or catalogue house itself. 

The same reason underlies the opposition to all these forms of 
distribution in which the dealer is not a factor, namely, that such 
sales tend to impair the profitableness of the retail business. Fur- 
thermore, the dealers are opposed to legislation authorizing any 
State to engage in the manufacture of any kind of farm machinery 
or accessories at penal institutions, because of the fact that the 
output of such factories is usually sold at prices below those charged 
for goods made at factories emplopng free labor, which are sold 

by dealers. 

To support their claim that " to the retail dealer belongs the retail 
trade," the dealers contend that any economy in distributing ex- 
penses that may be effected by the methods objected to is more than 
offset by the loss in service to the farmer on the one hand and to 
the manufacturer and wholesaler on the other. The dealers assert 
that they .offer a service to the farmer in setting up and operating 
128 



n/ 



machines, in providing repairs quickly, and in the selling of goods 
on credit, that is greatly superior to that offered by any other plan 
of distribution. They further assert that the sale of goods through 
dealers is more economical and satisfactory to manufacturers and 
wholesalers. 

Most manufacturers and wholesalers of farm machinery have vol- 
untarily adopted the plan of selling through dealers, a fact which 
has been of much importance to the organized dealers in efforts 
to secure the manufacturers' cooperation in confining sales of their 
products to sales made through the retailers. At the same time the 
dealers have also found that some manufacturers and wholesalers 
protect the dealers only because they feel compelled to do so. 

The desire for protection against such competition was the chief 
cause for the organization of dealers' associations which took place 
in the late eighties and early nineties. From the standpoint of the 
dealer the situation was acute. One of the leading implement trade 
papers claimed that manufacturers had been too free in dealing 
directly with farmers and in placing their goods on sale with irreg- 
ular agents, but it was alleged that the manufacturers were waking 
up to the importance of dealing " more frankly with the local deal- 
ers." It was pointed out that something was wanted that would put 
the business on a more solid basis ; something that would relieve the 
" overcrowding and weed out the irresponsible agents who sold on 
commission," and put a check on the manufacturer or jobber who 
exhibited a weakness for selling to farmers at wholesale prices. To 
remedy the situation the dealers were urged to organize for system- 
atic cooperation with the manufacturers. 

Shortly after the Kansas dealers' association was formed, in 1889 
(see p. 9), a committee of its members was appointed to confer with 
the Kansas City Implement Dealers' Association, as the implement 
jobbers' club was then known, in order to protest against retail sales 
by the jobbers at wholesale prices. It was reported that this protest 
was favorably received by the jobbers and that the members of the 
dealers' association agreed to patronize jobbing houses who afforded 
such protection. In 1892 the members of the Western association 
pledged themselves to report to the secretary of the association all job- 
bers and manufacturers who sold directly to farmers or to persons not 
regularly in the implement trade. It was made the duty of the sec- 
retary to take such reports up by correspondence and adjust them to 
the satisfaction of the dealers making the complaint. In case the 
offending jobber or manufacturer refused to comply with the requests 
of the dealers, the entire correspondence was to be submitted to the 
board of directors for report at the next regular meeting of the 
association. This plan seems to have been the one that was adopted 
at that time by most of the dealers' associations. In January, 1896, 
68248"— 16 8 



130 



FARM-MACHINEEY TRADE ASSOCIATIONS. 



EESTBIOTION OF RETAIL TBADE TO BETAIL DEALERS. 



131 



I 



the members of the Western association adopted the following reso- 
lution : 

Resolved, That we should pledge our support and patrona^ 
to none who will not in turn use their utmost endeavor to merit 
our good offices by refusing to sell to any person who is not a 
l^tunate dealer in the retail implement busmess, and that those 
who continue persistently to sell to other than legitimate dealers 
shall be placed under the ban of this association. 

To assist manufacturers and jobbers in distinguishing between 
regular and irregular dealers, the retailers' associations found it nec- 
essary to decide what qualifications should be taken to constitute a 
regular dealer. A definition of this sort, adopted by dealers' asso- 
ciations in Nebraska and North Dakota in 1895, was as follows : 

Any person who is engaged in retailing implements or vehicles, 
who carries at all times a stock of implements, or vehicles, ade- 
quate to the wants of the community, and who may regularly 
maintain an office as an implement or vehicle dealer, and keep 
the same open at proper business hours, will be considered a 
dealer imder this article. 

The minutes of the Western association show that during 1895, 

1896, and 189Y complaints were freely discussed among its members, 
and in 1896 this association began the publication of an official bulle- 
tin known as the Implement Dealers' Bulletin. Announcement was 
made that it would be the policy of the Bulletin to labor for the 
protection of regular dealers from the encroachment of "illegiti- 
mate" ones. One of the regular features of the Bulletin was the 
publication of a summary of complaints of direct and irregular 
sales, but the names of the parties were not usually given. Commu- 
nications published in the Bulletin urged members with complaints 
to come to the convention of the Western association in January, 

1897, prepared to make a strong case against any guilty party, with 
all the facts in concrete form, so that no time would be lost in pre- 
senting them to the meeting. A little later the Bulletin stated that 
it was about time an example was made of some of the offenders 
and that dealers knew their duty toward houses that persisted in 
ignoring their rights. In May, 1897, an editorial in the Bulletin, 
after expressing a belief that there were too many factories making 
implements and vehicles, went on to advocate an agreement by the 
manufacturers and jobbers to protect the legitimate dealers, to sell 
no goods at retail, and to establish no agencies with parties who were 
not regular dealers. This, it was said, would work no hardship 
upon any manufacturer or jobber, and dealers were urged to bend all 
their energies to this end, which it was thought could be done only 
by associated effort. 



^ 






¥> 



During the nineties the practice of harvesting-machine manufac- 
turers in placing agencies with irregular dealers was repeatedly con- 
demned by the dealers' associations. An editorial in the Bulletin in 
October, 1899, stated that the manufacturers of harvesting ma- 
chinery had made agency contracts with liverymen, blacksmiths, 
farmers, and others, and that these irregular dealers "rarely ever 
sell more than a sample * ♦ * but they are harassing to the 
regular dealer and cause him no end of annoyance during the season." 

The Bulletin, in commenting upon the situation in the early part 
of 1900, made the following statement: 

We do not concede the right to a plow manufacturer to place 
an agency with any one not a dealer in implements just because 
he can get no regular dealer in that line to represent him; then 
why should the privilege be accorded to the manufacturer of 
harvesting machmes ? * * * It is an utter impossibility 
for one dealer to represent several harvesting machines success- 
fully, and no town has enough dealers to represent all machines. 
The position dealers take is just this: that if a company can not 
get representatives through the regular channels, it would better 
move on to the next town where it can. 

By this time the agitation against direct and irregular sales had 
become general, and associations of implement and vehicle dealers 
had been organized in most of the States in the Middle West. It 
was felt that the only way in which satisfactory relations between 
the dealers on the one side and manufacturers and jobbers on the 
other could be maintained was for the latter to do a strictly whole- 
sale business and for the dealers to show their appreciation by giving 
such manufacturers and jobbers their trade. The question had also 
been raised whether a manufacturer or jobber should sell goods at 
retail at places where he had no agent and no prospect of securing 
one. Various views were expressed. In this connection, the secre- 
tary of the Western association in a report read at an executive 
session of the members of the Western association in January, 1898, 
made the following statement : 

In too many instances it is claimed that they had a perfect 
right to make the sales for the reason that they had no customer 
in the towns to which the goods were shipped, and our members 
should not complain because they had maintained a fair retail 

Erice, when in fact the margin over the wholesale price was not 
alf what the worst price cutter would consider a fair profit, 
and they invariably refuse to pay the complainant a commission 
because he is not their customer and has no right to demand it. 
As long as such practice is kept up just so long will the business 
be demoralized. 

The consideration of complaints against individual manufacturers 
and jobbers who were alleged to have made direct sales or sales 



132 



FABM-MAOmNEBY TEADE AS800IATI0NB. 



BESTEICTION OF BBTAIL TBADE TO RETAIL DEALERS. 



133 



r 



through irregular agents occupied much of the time of the dealers' 
associations. Almost from the beginning it became customary for 
the secretary of the Western association in his report to members 
at the annual conventions to summarize the complaints that had 
been filed during the preceding year and state what disposition had 
been made of them. As already pointed out, it was his duty to 
secure an amicable adjustment of complaints, generally by collect- 
ing from the manufacturer or wholesaler complained of a com- 
mission on the sale for the complaining dealer, and by securing a 
promise that future sales would be confined to regular dealers. At 
the annual convention of the Western association in January, 1899, 
nearly all the members present stood up when those who had been ■ 
benefited by receiving commissions on goods sold in their territory 
and by the discontinuance of irregular agencies were asked to rise. 
At this convention a section of the by-laws, which provided that 20 
per cent of all commissions collected for the members should be paid 
into the treasury of the association, was eliminated by unanimous 
vote of the members. 

The dealers finally became convinced that the situation could only 
be handled through the combined influence of the several State and 
interstate associations of dealers. Plans were accordingly made for a 
meeting at Chicago to confer with the harvesting-machine manu- 
facturers and to form a federation of the various dealers' associa- 
tions. In September, 1900, the federation was formed as planned, 
several of the most important dealers' associations being represented. 

(Seep. 10.) . 

Negotiations with harvesting machine cjompanibs.— During 
the first few years following the organization of the Federation its 
activities largely centered in efforts to induce the harvesting-machine 
manufacturers not to place agencies with persons whom the dealers 
did not consider to be implement dealers. A careful record was kept 
of all complaints filed against harvester companies. Some of the 
harvesting-machine manufacturers were reported to have assured 
dealers that they were in full accord with them, but the harvester 
committee of the Federation was apparently unable to induce the 
International Harvester Co. to assent to confining its trade to regular 
dealers. In November, 1904, however, it was reported that at a 
conference held between the harvester committee of the Federation 
and representatives of the International Harvester Co. of America 
the dealers again requested that the latter market its product only 
through regular retail implement dealers, to which the company 
answered that it was heartily in accord with the proposition and had 
taken favorable action on 75 per cent of the reports of irregular 
agencies furnished by the Federation the year before, and also, on its 



w 



^ 



own motion, had taken similar action on many other cases not 
reported. 

The report of the harvester committee read at the convention of 
the Western association in January, 1905, stated that efforts had been 
focused on the single point of trying to induce the International 
Harvester Co. to confine the trade in harvesting machinery ex- 
clusively to the regular retail implement dealers, but that the com- 
mittee had not been successful in getting the International Harvester 
Co. to declare itself positively upon this point. Substantial progress 
had been made, however, in the discontinuance of over 200 objection- 
able agencies since the report of the committee at the preceding 
convention. 

Section 2. Cooperation between federated dealers and organized manu- 
facturers. 

Establishment of harmonious relations between dealers' and 
manufacturers' organizations. — Efforts of the dealers' associations 
to enlist the assistance of jobbers' and manufacturers' organizations 
in confining trade to regular dealers met with a considerable degree 
of success. The officers and directors of the Western association con- 
tinued their efforts to enlist the assistance of the Kansas City job- 
bers' club in devising some plan by which direct sales through irregu- 
lar dealers could be discontinued. During the middle nineties, how- 
ever, the jobbers' club refused to amend its by-laws to provide that 
members should be bound to live up to any agreement that might be 
made with the dealers. The jobbers took the position that the 
dealer and the jobber should adjust any grievance between them- 
selves without the assistance of either of the two organizations. 
Some of the jobbing houses, however, announced that they had 
adopted a policy of selling no goods at retail. 

Efforts were made to enlist the assistance of the manufacturers 
belonging to the National Association of Agricultural Implement & 
Vehicle Manufacturers. The secretary of the Western association, 
in addressing the convention of the manufacturers held in October, 
1895, requested them to take some action to show to the dealers that 
it was their policy and purpose to protect the regular legitimate 
dealer and, if practicable, to appoint a committee to which the 
complaints of the dealers' associations could be referred. A few 
months later the executive committee of the National Association 
of Agricultural Implement & Vehicle Manufacturers adopted a reso- 
lution expressing the sympathy of their association with all retail 
dealers' associations in their efforts to protect the regular legitimate 
dealer in his trade in every way practicable, and the dealers' associa- 
tions were invited to send complaints of this character to the execu- 



#^ 



134 



FAEM-MACHINEEY TRADE ASSOOIATIOISra. 



BESTRICTION OF BETAIL l^RADE TO RETAIL DEALERS. 



135 



live committee of the manufacturers' association, and that committee 
was instructed to give such complaints due consideration. 

Further progress was made in January, 1900, at the annual con- 
vention of the Western association, at which it was reported that 
a resolution had been agreed upon by a conference of committees 
representing the National Association of Agricultural Implement & 
Vehicle Manufacturers, the Carriage Builders' National Association, 
the Kansas City Implement, Vehicle & Hardware Club, and the 
Western Retail Implement & Vehicle Dealers' Association. This 
was to the effect that — 

It is the sense of this conference of committees that we recom- 
mend that manufacturers abstain from selling goods to cata- 
logue houses and confine their business to sellingtheir goods to 
jobbers and retail dealers; ♦ * ♦ that the Western Retail 
Implement Dealers' Association take such action as will be 
necessary to furnish the manufacturers' and jobbers' associations 
with a correct list of the legitimate retail implement and 
vehicle dealers in the territory covered by said association, for 
the purpose of enabling the manufacturers and jobbers to fur- 
nish catalogues and prices to legitimate dealers only. 

The Bulletin expressed the hope that favorable action would be 
taken upon this resolution by the manufacturers' and jobbers' asso 
ciations, and a committee was appointed to carry out the spirit of 
the resolution. 

Shortly after the formation of the Federation, in 1900, the Na- 
tional Association of Agricultural Implement & Vehicle Manufac- 
turers created a standing committee on dealers' associations to con- 
sider all questions of mutual interest. It was arranged that one 
or more members of the committee should visit officially all meet- 
ings of dealers' associations which they thought advisable, confer 
with such meetings in any manner they thought proper, and make 
a report of the conference to the executive committee of the manu- 
facturers' association. In the latter part of 1901 this committee 
reported that members had visited meetings of the Iowa, Nebraska, 
and South Dakota dealers' associations, and that the full committee 
had visited the meeting of the Western association. The report con- 
tinued a^ follows: 

We believe in encouraging these associations • • • and 
helping them along in every way we can. * * * Our inter- 
ests are too closely connected to permit of anythmg but the most 
harmonious relations. 

mrectoriei of regular dealers,— ks an aid to the manufacturers 
and jobbers in determining whether prospective customers were enti- 
tled to consideration as regular dealers, and, apparently as a result of 
the resolution of the committees mentioned above, the Western asso- 



4v 



i» 



ciation in 1901 began the annual publication of a list of regular 
dealers at towns where that association had members, and in 1902 

^ also inaugurated a movement to enlist the assistance of the manu- 

facturers and jobbers in securing stricter classification of implement 
and vehicle dealers by the conmiercial agencies. The directory of 
the Western association was favorably received by the members of 
the National Association of Agricultural Implement & Vehicle 
Manufacturers, the secretary in 1901 being instructed to furnish each 

A member with a copy with the recommendation that at the towns listed 

manufacturers should confine their sales to the legitimate dealers 
named in the list. This list was also placed in the hands of the Kan- 
% sas City jobbers. In 1907 this plan of keeping goods out of the hands 
of irregular dealers was reported to be working well. The Western 
association has continued to issue this directory annually to the pres- 

m ent time, and they have also been issued by other State associations, 

including the Tri- State association (covering Ohio, Kentucky, and 
Indiana) and the Texas association. 

Commercial agency reports. — ^The movement started at the con- 
vention of the Western association in January, 1902, to secure a bet- 
ter classification of implement and vehicle dealers by the commer- 
cial agencies so that catalogue agents should not be classed as dealers, 
was taken up by the National Association of Agricultural Implement 
& Vehicle Manufacturers at its convention in 1903. Its committee 
on dealers' associations recommended that the members of the manu- 
facturers' association address letters to all the commercial agencies 
to which they were subscribers, urging a more definite classification 
of "regular" implement and vehicle dealers, regular dealers being 
used by the manufacturers as defined by the dealers' associations, 
namely, a dealer who had a regularly established place of business 
and who carried a stock of goods commensurate with the trade of 
his vicinity. ITiis recommendation was adopted. 

The conmiercial agencies, however, do not appear to have made 
these changes, for the request of the dealers to the manufacturers 
was renewed a few years later. It was explained to the committee 
of the manufacturers' association that the earlier request had been 
favorably received by the manufacturers, who had obtained assur- 
ances that the lists would be so revised. 

At the conference of the manufacturers' committee on dealers' 
associations with the Federation in October, 1908, the dealers re- 
ported that many of those still listed as implement dealers by the 
commercial agencies were not dealers, and they asked the help of the 
manufacturers in getting the commercial agencies to correctly classify 
the dealers. This request was brought up at a later meeting of the 
executive committee of the National Association of Agricultural 
Implement & Vehicle Manufacturers and referred to its committee 



136 



FAKM-MACHINERY TBADB ASSOOIATfONB. 



on dealers' associations. The records do not show whether this 
effort was successful. 

Conferences between representatives of dealers^ and numufac- 
imrers^ organizations, — ^After the formation of the Federation the 
holding of conferences became a characteristic feature of associa- 
tion work, especially those held between the committee on dealers' 
associations of the National Association of Agricultural Implement 
& Vehicle Manufacturers on the one hand and committees of the 
Western association and the National Federation on the other. 
Eepresentatives of the manufacturers' association continued (see 
p. 134) to attend meetings of the dealers' association, and in August, 
1907, the Implement Dealers* Bulletin stated that the work of the 
organized dealers was in harmony with those manufacturers who 
recognized the necessity of the retail dealer as the proper and 
economical distributor of their products. The members of the Na- 
tional Association of Agricultural Implement & Vehicle Manufac- 
turers were already committed to this proposition, and it was an un- 
written qualification for membership in the National Plow Associa- 
tion (organized in 1907) that sales should be confined to the retail 

trade. 

When the National Federation met in October, 1908, the delegates 
determined to secure some kind of a reform in a systematic way to 
obtain a larger measure of protection for their members. To bring 
about a better understanding with the manufacturers, it was decided 
that the executive committee of the Federation should act in conjunc- 
tion with a committee of the National Association of Agricultural 
Implement & Vehicle Manufacturers as a joint committee to consider 
matters of common interest. 

The joint board held a conference at that time, at which the dealers 
requested the help of the manufacturers in abolishing commission 
contracts, which they believed to be the cause of many irresponsible 
parties being furnished with goods on consignment to the detriment 
of the regular dealers.* The matter of direct sales to farmers was 
also discussed, especially of the kinds of farm machinery that dealers 
do not ordinarily carry in stock, namely, threshers, power com shell- 
ers, hay presses, and other large machines. No definite conclusion, 
however,- seems to have been reached in this matter. The results of 
this conference were reported to the convention of the manufac- 
turers' association held a little later. In making his report the 

^In this connection, the Federation at its meeting In 1909 adopted the followlnff 
resolution : 

The commission contract stUl used by certain manufacturers and jobbers with 
dealers not worthy of credit Is placing dealers with capital Invested at a great dls- 
advantage. U Is evident that this condition Is responsible In no small degree for 
the continued use of canvassers. ^ . ^ . . 

Therefore he it resolved. That the commission contract and carrying clause are 
trade abuses which should be eliminated. 



/ 



BESTBIOTION OF RETAIL TBADB TO EBTAIL DEALERS. 137 

chairman of the committee on dealers' associations made the follow- 
ing statement : 

In our intercourse with the dealers individually, and with 
their oflficers and committees, both in the State associations and 
in the general Federation of Dealers' Associations, we are very 
glad to report we have found them, almost without an exception, 
disposed to be reasonable, at least from their point of view. 
Their requests may not always accord with our own ideas, but, 
if not, they are willing to talk about it, and if we think their 
reque^s are too strong they are willing to modify them, and we 
also believe they would be equally fair and reasonable about any 
requests we may think best to make of them, for, when it comes 
down to a fijial analysis, the interests of the dealer, jobber and 
factory are mutual and identical, and it is our opinion that all 
parties in this trade have already realized this fact, and are 
willing in a great measure, to pull together for the mutual benefit 
of all. 

These matters were among the subjects considered at a meeting 
of the executive committee of the National Association of Agricul- 
tural Implement & Vehicle Manufacturers held November 13, 1908. 
This committee referred the matter of abolishing consignment con- 
tracts to the association's committee on dealers' associations. 

The immediate cause of the appointment of the joint committee 
seems to have been the unsatisfactory conditions existing in the sale 
of manure spreaders. The manufacturers of spreaders belonging to 
the National Association of Agricultural Implement & Vehicle 
Manufacturers had already organized a subcommittee of that asso- 
ciation, and a conference was held with the dealers at the convention 
of the Western association in January, 1909. The dealers were rep- 
resented by the boards of directors of the Western and the Iowa 
asociations, and eight of the principal spreader companies had rep- 
resentatives present. Resolutions were adopted to the effect that 
manufacturers and jobbers should discontinue all sales of spreaders 
directly to user, that each dealer should have sufficient exclusive terri- 
tory, that spreaders should not be sold to dealers on a consignment 
contract, and that dealers should discontinue the use of canvassers 
furnished by the manufacturer or jobber. 

The lack of protection given dealers by manufacturers and job- 
bers on manure spreaders was again taken up in the Bulletin in 
May, 1910. This article stated that reports were coming in from 
some localities of the complete demoralization of the spreader busi- 
ness and that it had been somewhat difficult to locate the ones most 
to blame. It was thought, however, that the practice of certain 
manufacturers in selling directly at little, if any, above the net price 
to dealers was undoubtedly the most prolific source of trouble. 
To arrive at the facts the members of the constituent associations of 



138 



FARM-MACmNBEY TRADE ASSOCIATIONS. 



the Federation were asked to forward to the secretaries of their re- 
spective associations answers to certain questions as to the makes 
nnd prices of spreaders sold at their towns; whether manufacturers 
and jobbers were selling directly there, and whether mail-order 
houses were getting any of the business. The article concluded as 
follows : 

The first step in bettering conditions in this line is to secure 

the data ; this the members must furnish. Will you do your part, 

and do it now? 

A conference with representatives of the windmill and pump 
houses was held at a meeting of the directors of the Western asso- 
ciation in September, 1909, and the subject of better protection in 
those lines was thoroughly discussed, but the results are not reported. 

Opposition to manufacturers' branch retail stores. — ^Toward 
the latter part of 1908 implement dealers in Iowa became alarmed 
by the threatened competition of a number of branch retail stores 
that were being established in the western part of that State by cer- 
tain wholesale interests for the purpose of retailing their own goods. 
The delegates to the meeting of the Federation in October, 1908, 
were unanimous in condemning this practice, and voted as the sense 
of the FederaticMi that no manufacturer seeking the dealers' trade 
and no jobber should be interested in retailing implements and ve- 
hicles in any way. 

The matter of branch retail stores had been taken up several years 
earlier by the National Federation on complaint of the implement 
dealers' association of Texas in 1901. At that time the manufacturer 
ccHnplained of appeared before the Federation delegates to give 
assurances that it was not the policy of his company to antagonize 
the dealers and promised to see that the matter was thoroughly 
investigated. According to the Federation minutes in 1902, the Texas 
case was practically adjusted, as the manufacturer had given orders 
to close all of the branch houses, except transfer houses, as rapidly as 
possible. This action in closing these houses was attributed by a 
trade paper to the influence of the Federation. 

In 1908, several branch retail stores had been opened in western 
Iowa by one of the largest plow manufacturers in the United States, 
and also by a prominent Omaha jobbing house. The dealers re- 
quested the discontinuance of these stores. One of the leading imple- 
ment trade papers, which quite naturally took the dealers' point of 
view, <xHiceded that such stores would be obliged to bear the same 
i«nt, taxes, insurance, and other expenses as the independent dealer, 
but pointed out that it was claimed that the branch retail stores re- 
ceived inside prices and, furthermore, that the manufacturer would 
be satisfied if he realized the same profit that he would on goods fur- 
nished to the regular dealer. 



# 



^ 



BBSTRIOTION OF RETAIL TRADE TO RETAIL DEALERS. 139 

The Bulletin for November, 1908, characterized the conditions 
confronting the Iowa dealers as the gravest that they had faced since 
the organization of the retail implement dealers. 

The following resolution had been adopted at the annual meeting 
of the Federation in October, 1908 : 

It being rumored that certain manufacturers of farm imple- 
ments are contemplating the establishment of retail branch 
houses for the sale of their products, we recommend that the 
Federation go on record as absolutely opposed to the retailing 
of goods directly or indirectly by jobbers or manufacturers. 

The Federation made this subject one of the principal matters of 
discussion at its meeting in October, 1909, and adopted a resolution 
denouncing such a system as "unfair, unwise and unbusinesslike," 
and expressed the belief that, if continued, it meant " the disruption 
of trade relations and the elimination of the retail dealer and his 
best friend— the smaller manufacturer." It was voted to refer the 
matter to the joint arbitration committee of the manufacturers' asso- 
ciation and the Federation. The matter was discussed in conference, 
and it was decided to consider the matter further during the conven- 
tion of the manufacturers' association to be held a little later, when 
the companies complained of would be invited to be present. When 
this meeting was held, the position taken by the company especially 
complained of was that the branch stores were private enterprises of 
their manager at Omaha. No formal action was taken by the com- 
mittee. The members of the National Association of Agricultural 
Implement & Vehicle Manufacturers, however, adopted the follow- 
ing resolution: 

Whereas, the establishment by manufacturers of branch stores 
for the purpose of retailing their own goods would mean finally, 
the disruption of trade relations and the elimination of the re- 
tail dealer; be it 

Resolved, That we are opposed to the establishment of such 
houses, believing that "to the retail dealer belongs the retail 
trade." 
Shortly after the Federation meeting the secretary wrote one of 
the prominent members of the Western association that he was in 
receipt of information that the plow company in question was also 
establishing retail branches in Portland (Oreg.) territory, and there 
were also a few in Kansas and Oklahoma, which, he stated, were 
big concerns. A few days later the secretary wrote another promi- 
nent dealer belonging to the Western association regarding the con- 
ference that had been held at Chicago, when the matter was taken 
up before the arbitration committee with some of the high officials 
of the plow company present. He stated that they set up the de- 
fense that these branches were conducted solely by their managers 



140 



FARM-MACHINERY TRADE ASSOOUTIONB. 



who financed them and that the plow company itself had no money 
m them. The secretary expressed his opinion, however, that the offi- 
cials were in a position to control such matters and that the dealers 
would demand that they do so. At about the same time the secre- 
tary also addressed a manufacturer who had apparently written him 
requesting literature on the subject of branch retail stores. In this 
letter, after citing mstances where the dealers' trade had been 
impaired by branch retail stores, he said, in part: 

I only mention these matters to give you a general idea of 
what a dreadful menace the branch-house evil is to the regular 
dealer. The danger is that if these branch houses are success- 
ful other manufacturers and jobbers will adopt the plan, and 
that it will eventually mean an entire change m the retail busi- 
ness. The International Harvester Co. at one time employed a 
great many salaried agents who were in reality only branch- 
house managers. They have, if our information is correct, dis- 
continued practically all of these. I know of none now withm 
the territory of the Federation. We have the statement of the 
sales managers that none exist anywhere. But you will readily 
see that if the other large manufacturers are allowed to handle 
the retail business in this way, no objection can be made to 
the International Harvester Co. if they see fit to adopt the same 

^ This is the subject which is now worrying the dealers more 
than anything else, and the supposition is that it will be dis- 
cussed at all of the conventions and probably handled without 
gloves. 
In another letter in the latter part of November, 1909, the secre- 
tary of the Federation expressed his opinion that the branch house 
was the most serious existing menace to the implement business. He 
said that some persons had declared to him that the implement busi- 
ness was on trial. He stated, however, that he could not feel that 
this was true to a very alarmmg extent, but he did know that the 
plow company in question was establishing a great many branch 
houses, particularly m good localities where they had no regular 
customers. He thought that the matter would be a subject of warm 
debate at the conventions of dealers in Iowa and Nebraska. He 
thought a firm stand must be taken. , , . 

At the conventions of the various dealers' associations belonging 
to the National Federation in the latter part of 1909 and early part 
of 1910 the matter of branch retail stores was a prmcipal subject 
of discussion. The Implement Dealers' Bulletin in February, 1910, 
printed the resolutions condemning such stores which had been 
passed by the National Federation as well as the Iowa, Illinois, 
Western, South Dakota, and Mid-West (Nebraska) associations. 
In conclusion, the Bulletin made the following comment : 

It is all right for them [dealers' associations] to define their 
position regarding this matter, but adopting resolutions is only 



BBSTRIOTIOlSr OF RETAIL TRADE TO RETAIL DEALERS. 141 

the preliminary proceeding. If dealers expect anything to be 
accomplished they must assist in supplying information, they 
must uphold the hands of their officers, and they must assist in 
strengthening their organizations so that they will become a 
still greater power than they are at present and be in a position 
to enforce their demands. 

Now do not say, " Yes, that is so," then forget all about it, 
but go to work. If your dues are in arrears, remit, for it takes 
money to carry on this work. If you have a competitor who is 
not a member, go to him and explain the situation and secure his 
application. Association officials are thoroughly alive to the 
importance of aggressive action, but they must have your sup- 
port. Will you see that they receive it ? 

The subject was again taken up at the annual meeting of the Na- 
tional Federation at Chicago in October, 1910. The president in 
his address stated that, with a single exception, all manufacturers and 
jobbers who had been interviewed on the subject denied owning or 
being interested in any retail branch store. He stated that the mat- 
ter of finding out the facts devolved upon the different constituent 
associations of the Federation, and asserted that it was necessary 
for the Federation to have reliable information as to the identity 
of the offending manufacturers and jobbers before it could take 
action. Reference to this matter was also made in the report of the 
secretary. He characterized it as a subject of most vital importance 
for consideration. One session of the convention was taken up al- 
most entirely with a discussion of the reports in regard to branch 
retail houses, and the question was finally referred to the com- 
mittee on resolutions with instructions to define the position of the 
Federation. A special committee was appointed to consider evidence 
that had been introduced and to make further investigation. 

The matter was also brought up at the conference between com- 
mittees of the Federation and the National Association of Agricul- 
tural Implement & Vehicle Manufacturers. It was reported that at 
this conference the representatives of the dealers' Federation ex- 
plained the specific complaints which had been filed and asked for 
the cooperation of the manufacturers in discountenancing and dis- 
couraging the spread of this class of retail establishments. The 
alleged demoralizing effect these stores had on the trade of dealers 
in localities where they were maintained was shown, and it was the 
consensus of opinion that great good could be accomplished by the 
cooperation of all of the associations in all branches of the trade. 
The burden of furnishing proof in cases reported, it was agreed, 
• should rest with the dealers. 

At this meeting the delegates to the Federation meeting recom- 
mended that each of the constituent associations should amend its 



142 



VABM-MAOHINEBY TEADE ASSOCIATIONS. 



constitution by eliminating the article relating to members reporting 
direct sales to ^e secretary of the association. (See p. 187.) The 
dele/^ates also recommended the elimination of the second paragraph 
of the declaration of purpose, which read as follows: 

We recognize the absolute right of every person, partnership 
or corporation to establish and maintain as many retail stores 
as he, they, or it may see fit. 

Eesolutions adopted by the Federation at this time read as follows: 

Evidence having been submitted showing that a few jobbers 
and manufacturers still persist in maintaining retail branch 
bouses. 

We, your committee, do most earnestly emphasize our Federa- 
tion principle that " to the retailer belongs the retail trade," and 
denounce in unmeasured terms as unfair, unreasonable and 
unbusinesslike the practice of so entering into competition, 
directly or indirectly, with the regular retail dealers, upon 
whom they must, and do depend, for the bulk of their business. 

Shortly afterwards the committee on dealers' associations reported 
to the members of the National Association of Agricultural Imple- 
ment & Vehicle Manufacturers that the Federation had presented to 
the manufacturers' committee for consideration the dealers' earnest 
and aggressive opposition to manufacturers or jobbers owning, oper- 
ating, or being interested in retail implement and vehicle stores. In 
accordance with the recommendations of this committee, the members 
of the National Association of Agricultural Implement & Vehicle 
Manufacturers voted to adopt a resolution reaffirming and emphasiz- 
ing the resolution on this subject adopted the year before. (See 
p. 145.) 

Under date of October 25, 1910, the secretary of the National Fed- 
eration in a general letter to secretaries of the constituent associations 
on the subject of convention programs pointed out that the dealers 
in many localities were alarmed over the "branch-house evil," and 
that the Federation had asked for further evidence to establish be- 
yond question the extent to which this evil was spreading. He 
advised the secretaries that it was a subject that should be discussed 
at the conventions of their associations and that it was possible that 
it would be better to do so in executive session. He requested them 
to note the position taken by the Federation and the trend of the 
discussion of the subject at the conference with the manufacturers. 

In November, 1910, the secretary of the Federation wrote one of 
the dealers a confidential letter in which he stated that another 
interview had been held with a high official of the plow company 
complained of as establishing branch retail stores. The secretary 
stated that this official had promised to go to Omaha himself to make 
a personal investigation of conditions. In this letter the secretary 
said, in part: 



^ 



>■ 



BESTBIOTIOK OP BETAIL T&ADE TO RETAIL DEALERS. 



143 



1 



I refer to the trouble with branch houses. I believe that we 
have that situation pretty well in hand. Such a tremendous 
uproar has gone up that I doubt if those people will establish 
any more even though they may not discontinue what they have. 
I thought this information might be of interest to you on account 
of conditions at Chillicothe. 

In April, 1912, the secretary of the Iowa dealers' association wrote 
the secretary of the National Federation in regard to the activities 
of his association in the matter of branch retail stores. He stated 
that one of the members, whom he mentioned, would do his utmost to 
convince the plow company (whose policy of maintaining branch 
houses had created so much apprehension among the dealers) that 
4,mch a policy was a bad one to promote, being detrimental to the 
trade. The secretary of the Iowa association also expressed his opin- 
ion that if the Iowa association could not have the cooperation of 
other organizations it could not make effective opposition. He 
thought the policy was going to become general unless the dealers 
were active, and he stated that it was reported that a buggy com- 
pany, the name of which he gave, had already established four re- 
tail branches in Iowa. He believed that it would not be long until 
\ other manufacturers followed suit and that the very existence of the 
retail dealers was threatened. He went on to say: 

We can voice our opposition in a proper manner, and if [we] 
have the facts to present, we should at least get a fair hearing. 

He appeared to think that if the dealers went to the plow company 
in question without any evidence their efforts would be unavailing. 

At the convention of the Federation in October, 1912, the report 
of the secretary stated that manufacturers' branch retail stores in 
some localities were causing dealers much uneasiness and annoyance, 
and was of so much importance that it should have attention. 
Among the resolutions adopted by the delegates at this convention 
was one to the following effect: 

The maintaining of retail stores by jobbers and manufac- 
turers is unjust, and is emphatically condemned not only by this 
Federation, but by right thinking men in all lines. Improved 
conditions of the trade is shown by the fact that but one promi- 
nent manufacturer continues to maintain such branches, and it 
is only fair to state that the number is reduced and we are 
assured it is the policy of this company to soon discontinue 
them entirely. 

Direct sales in LOCALrriES where manufacturer has no agent. — 
At the annual meeting of the National Federation in October, 1909, 
the president expressed his belief that the Federation should outline 
clearly to each constituent association its views regarding the condi- 
tions under which manufacturers should sell their goods to con- 
sumers in territory where they had no representatives, a matter that 



J I 



144 



FAEM-MACHINBBY TRADE ASSOOIATIOKS. 



had already been brought up by the dealers. (See p. 181.) A little 
later, at a meeting of the conference committees of the National 
Federation and the National Association of Agricultural Imple- 
ment & Vehicle Manufacturers, in October, 1910, at which the matter 
of branch stores operated by manufacturers was discussed (see 
p. 141), the committee representing the Federation took the position 
that manufacturers who sell the bulk of their output to dealers 
should not sell at retail. Instances were mentioned where manufac- 
turers had sold goods directly and when called to account had 
replied that they were holding commissions to be paid to a dealer 
who would contract for their goods. The dealers insisted that this is 
not affording the trade full protection. One member of the manu- \ 
f acturers' committee said that this seemed to be a new phase of the 
direct-selling question, and it was his opinion that manufacturers 
claimed the right to sell directly at retail prices where they were 
not represented by dealers, especially where they were introducing 
new goods and did not see how they could introduce new goods 
successfully where they were imable to interest dealers unless by 
selling directly. He expressed the opinion that this evil had not 
reached very serious proportions. Another member said that as a 
general rule manufacturers believe that it is no violation of trade 
ethics to sell directly at retail prices and pay the commission to the 

nearest dealer. 

The committee representing the dealers said that of course they 
would acquiesce in that kind of an arrangement, but that commis- 
sions in such cases were rarely ever paid until such time as an agency 
could be established, and insisted that the manufacturers in all cases 
where direct sales are made should try to make delivery through 
some regular dealer, permitting the customer to name the dealer 
through whom he would prefer having delivery made. They also 
took the position that in a very large majority of direct sales prices 
maintained are much lower than the dealer must get if he properly 
figures his costs. They expressed the belief that it might not be 
possible to make any hard and fast rule, yet dealers must have 
better cooperation on the part of manufacturers and jobbers than 
they were receiving. The representatives of the manufacturers' 
association promised to present the views of the dealers to the next 
convention of the manufacturers' association and to urge action 
along the lines suggested. In connection with this subject, the 
Federation adopted the following resolution: 

In view of the resulting strife and demoralization caused by 
direct sales by jobbers and manufacturers, ♦ ♦ ♦ goods in 
our line should be marketed through the regular retail dealers, 
and that even if extreme circimistances seem to justify a sale to 



4.' 



BESTBIOHOK OF SBTAIL TRADE TO RETAIL DEALERS. 146 

user it should never — ^under any circumstances whatever — ^be 
made except at a fair reasonable retail price and delivery should 
in all cases be made through some retail dealer. 

The representatives of the manufacturers' association in their re- 
port to the convention of the National Association of Agricultural 
Implement & Vehicle Manufacturers, in November, 1910, explained 
this attitude of the organized dealers toward direct sales, as follows : 

They presented to us a question that to them, and to us, is 
of great importance; and that is, the retailing of goods by fac- 
tories and jobbers direct to consumers. They request as follows: 

First. That all such sales, as far as possible, should not be 
made, but that the consumers be referred to the nearest retail 
^ dealer. 

Second. That if any sales at all are made direct to con- 
sumer they should always be made at proper retail prices — 
such as will give the dealer a legitimate profit above his expense 
of doing business. 

Third. That where it is impractical or impossible to make 
such a sale through a dealer, the sale should be made at retail 
prices, and that delivery should be made through some dealer. 

In behalf of these requests, the dealers state that it is not 
alone the question of the profit on any particular retaU sale 
that might be made, though as to that they feel that some dealer 
should always have the profit or commission, but the main 
point to which they object, in the retailing of goods by factories 
and jobbers direct to consumers, is that it gets such consumers 
into the notion that it is a good thing to buy direct from the 
factory. Probably some members of our association do not 
realize how much is going on in the trade along these lines of 
direct selling. Nowadays there are not only the old-time cata- 
logue houses selling all lands of goods, including implements and 
vehicles direct to consumers, and at prices which they are try- 
ing to make the consumer believe are wholesale prices, but there 
are several direct selling factories in the implement and ve- 
hicle lines. 

At this convention the manufacturers adopted the following reso- 
lution : 

Resolved, First. That we reaffirm and emphasize the resolu- 
tion adopted last year at our convention in Chicago against the 
establishment of retail houses by factories and jobbers. 

Second. Whenever it is necessary for a factory to make a 
direct sale to the consumer, that it ought to be done at retail 
price, and when at all practical said machine or vehicle should 
be delivered through some dealer. 

Third. That the secretary be and is hereby instructed to mail 
a copy of this resolution to each member with a special bulletin 
calling attention to same, on account of the unusual importance 
this resolution to the trade. 

Resolved, That we express our appreciation of the coopera- 
tion of the Dealers' Federation in their efforts to eliminate trade 
evils and in promoting the general welfare of the business. 



e8248'— 16- 



-10 



146 



FABM-MAOHnraKT TBADB A880CIATIOH8. 



SESTBICTION OF KBTAIL TBADB TO BETAIL DEALEBS. 



147 



!) 



In compliance with this resolution, the Secretary of the National 
Association of Agricultural Implement & Vehicle Manufacturer 
issued a circular letter to members under date of November 11, 1910, 

in which this resolution (which also related *^tl»« ;^'*''^^^Jj"«'Jl*^ 
branch retail stores by manufacturers) was set forth. Ihis letter 

concluded as follows: 

Every time you fail to be governed by the spirit of t^^^^^y 
lutions vou take a step towards the elimmation of the retail 
d^ra Hactore in the sale and distribution of your product. 

WraS.e!d toyou to assist in curing this menace to the ex- 
istence of the independent retail dealer. 
At a conference between the conference «>mmittees of the Na- 
tional Implement & Vehicle Association and *e We^m .^m- 
tion held in January, 1911, the dealers present agam J'^'^^g^* ""P *J« 
subject of direct sales in territory where the manufacturers could 
find no regularly established dealer to represent their Imes. ahe 
chairman of the manufacturers' association committee was ques- 
tioned as to the attitude of the manufacturers on this subject. He 
replied that the manufacturers belonging to the National Implement 
& Vehicle Association stood with the dealers' associations on the prin- 
dple that to the regular retail dealer belongs the retail trade but 
hfLked how manufacturers could ever introduce new machm^ 
into territory where the dealers would not take up the sale of such 
^tSess the manufacturer sold directly. ?- <^^e dea^- 
present expressed the opinion that the position of the dealers a^ 
dations might be somewhat elastic in such -^Jl^^'^^^s 
elusion was reached, but it was pomted out to the manufacturers 
that by direct sales in invading territory where other manufacturers 
of similar goods were selling through the regular dealers, reprisal 
was invited from these other manufacturers in other sections where 
the latter had no agents but where the former class of manufacturers 
mieht have a trade with dealers. It was pointed out that in this 
way the whole system of marketing through dealers might become 
demoralized, since it would be impracticable for all manufacturers 
to be represented everywhere by regular dealers. 

Dbm^' associations and the thkesheb TRADE.-The retail dealer 
is a less important figure in the sale of threshmg machinery than m 
the sale of most other kinds of farm machinery and implements, ow- 
ing principally to the expensive character of threshing outfits, the 
nJeiity imposed upon manufacturers of extending long terns of 
credit to purchasers, and the pressure of competition among manu- 
facturers to dispose of factory output. Consequently, a large pro- 
portion of sales is made directly to the farmer or thresherman 
airough salesmen employed by the manufacturers. The manufac- 
turers, however, have continued to make commission contracts with 



ii^ 



«» 



4 



^ 



dealers in order to secure their local influence in pushing sales, to get 
reports concerning prospective customers, and to have them handle 
repair parts. 

During the last three or four years a committee of the imple- 
ment dealers' Federation has made a determined effort to secure 
a larger proportion of the trade to dealers. The matter has been 
presented to the National Association of Thresher Manufacturers, 
and conferences have been held between the executive committee of 
that association and representatives of the Federation. Little prog- 
ress, however, has been made. Individual thresher manufacturers 
assure the dealers that they desire to sell through them to as great 
^ an extent as possible, but point out difficulties that render the use 
of this method of sale impracticable under present conditions in the 
thresher trade. Furthermore, dealers' associations take the position 
that the dealer should be allowed a commission on all thresher repairs 
sold by him, irrespective of whether he has any contract with the 
particular manufacturer from whom such repairs are ordered. This 
matter is still unsettled between members of the thresher manu- 
facturers' association and of the federated dealers' associations. 

Section 3. Settlement of complaints against individual manufacturers. 

The by-laws adopted by the Federation in 1900 provided as 
follows : 

All complaints made against manufacturers, jobbers and 
wholesalers shall be first taken up and be referred to the secre- 
tary of the association in which the complainant may hold his 
membership, for adjustment. In case of failure to make a satis- 
factory settlement, said case shall be referred to the secretary of 
the National Federation; if such complaint can not be adjusted 
by the National Federation, it shall be the duty of the national 
secretary to notify the secretaries of the several retail associa- 
tions and they shall at once notify all members thereof. 

Methods of adjustment by State associations. — Most complaints 
were settled by the secretaries of the constituent associations with- 
out being referred to the Federation. Similar methods were adopted 
by the different associations to bring about an adjustment. Wbere 
a complaint was filed by an aggrieved dealer, it was the duty of 
the secretary to verify the facts and endeavor to adjust the situa- 
tion amicably with the manufacturer complained of, collecting a 
commission on the sale for such dealer or for some other dealer in 
the locality where the sale had been made. It was also a part of the 
secretary's duty to secure a promise from the manufacturer that his 
future sales would be confined to regular dealers. If the secretary 
was unable to effect satisfactory settlement, the correspondence in 
the case was submitted to the board of directors or grievance com- 



9 



148 



FABM-MAOHINEBY TBADB ASSOOUTIONa 



mittee, which held meetings from time to time to consider the evi- 
dence in pending complaints. It was customary for this committee 
to request manufacturers and jobbers complained of to appear at 
such meetings to explain their side of the case. Under this method 
of handling complaints, most cases were amicably disposed of, but 
in some instances the facts were discussed at executive sessions of 
the entire membership present at conventions. 

In the settlement of complaints the dealers took the position that 
a proper policy of protection on the part of manufacturers should 
provide " for the placing of agencies with parties who are regularly 
established in that line of business; declining aU orders from parties 
who simply sell from catalog, order goods as they sell them and 
carry no stock on hand; selling no goods at retail; selling no goods 
to catalog houses or trailors ; and be willing at all times to correct 
any mistakes made that interfere with the welfare of the legitimate 

dealer." 

The president of the Nebraska association in his annual address 
to the members m 1901 stated that the manufacturers were accedmg 
to some extent to the wishes of the dealers, and so far as he knew 
they were anxious to see them succeed and prosper, realizing that 
their interests were mutual. The secretary of the Nebraska asso- 
ciation reported that in 1895, when the association had less than 100 
members, he had received 37 complaints, but during 1900, with over 
400 members, he had received only 13 complaints of illegitimate 
shipments. In all cases he had found that the trouble arose in re- 
gard to the definition of dealer. He said that in most cases the 
manufacturers had been willing to do what was right, but a few 
small manufacturers still quoted prices to the consumer. He ex- 
pressed the opinion that the work of the associations had about 
reached the point where no reputable house would make shipments 
to consumers without crediting up the commission due to the dealer 

affected. 

In January, 1902, the president of the Western association stated 
that there were still some manufacturers and jobbers who made con- 
cessions unwillingly, and others who attempted to sell a small part 
of their output through legitimate dealers and the larger part 
directly 'to consumers. He expressed the hope that the members of 
the Western association were " too well conversant with their own 
best interests and too loyal to those who cater only to the legitimate 
trade to be caught by such chaff." At this convention the report of 
the grievance committee was scheduled to be made at executive ses- 
sion, the other committees to report in open session. The issue of 
the Implement Dealers' Bulletin in February, 1902, stated that this 
executive session was the most remarkable one ever held by the West- 



t 



BESTBIOTION OF RETAIL TRADE TO RETAIL DEALERS. 



149 



^ 






^ 



em association, there being over 500 present, all of whom were 
members. 

Apparently for the purpose of pointing out that the activities of 
the Western association were effective in affording protection to its 
members, the Bulletin published the following article in March, 
1902: 

Evidence that the association protects is contained in two 
letters, from which quotations are made, one from a large ve- 
hicle concern which used to make shipments to parties who were 
not dealers, reporting that it has recommended that a certain 
dealer join the association and qualify for recognition as a 
legitimate dealer. The second letter, from a manufacturer who 
did not find the name of a party wishing to order a vehicle, in 
the directory, runs as follows: 

"We desire to assure you that unless this party qualifies for 
membership in the association, we certainly will decline to re- 
ceive any business from him. The. tenor of his correspondence 
indicates that he is very anxious to become a legitimate dealer, 
and while you state that you have information showing that he 
is merely a catalog dealer, yet it is very possible that he con- 
templates expanding his business. At all events we will make 
no further shipments to him until he satisfies both yourself and 
us that he is entitled to be regarded as a legitimate dealer." 

The Bulletin issued in November, 1905, contained a summary of 
the accomplishments of the Western association. In this summary 
it was stated that the prime object of its organization was protection 
of its members' interests and the prevention of direct sales or sales 
to catalogue agents. As proof that the association had been success- 
ful it claimed that over 1,200 complaints had been satisfactorily ad- 
justed and that sales to users were few and far between as compared 
with former years. Among other achievements, it claimed that the 
cultivation of friendly relations by manufacturer, jobber, and dealer 
had resulted in better protection to the latter and the discontinuance 
of hundreds of irregular or catalogue agencies. In a subsequent 
issue of the Bulletin, members of the Western association were urged 
not to miss the executive session of the convention in January, 1906, 
at which the report of the grievance committee and various phases 
of the catalogue-house question were to be taken up. It was stated 
that no report of the meeting would be published, and the only way 
for members to learn what had been done and what was in progress 
in the way of securing protection for members, was to attend this 
session. Furthermore, there were some matters that the officers had 
been unable to adjust, regarding which they would ask the conven- 
tion for further instructions. The various other constituent associa- 
tions of the Federation continued to handle complaints from their 
members. 






150 



FABM-MAOHINEBY TRADE ASSOCIATIONS. 



In March, 1906, the directors of the Western association took 
action deploring the methods of many scale, gasoline-engine, hay- 
press, and windmill manufacturers in not marketing products 
through regular implement, vehicle, and hardware dealers. The 
directors recommended that the members of the Western association 
make contracts with " reputable " manufacturers and jobbers in these 
lines and prosecute sales vigorously as the surest means of upholding 
the committee in its efforts to remedy the existing conditions. The 
Bulletin pointed out that the dealer must be able to handle the trade 
according to the demands of his territory, as otherwise the board of 
directors had small chance to assist him in contending for commis- 
sions on sales. In August, 1906, the BuUetm gave the name of a 
scale company which was reported to be selling directly to the user, 
and published letters from two other companies as to their policy in 
protecting dealers. The board of directors held a meeting in July, 
1906, at which 20 cases wei*e taken up and disposed of, interviews 
with managers of the defendant concerns being held in some cases. 
It was reported that where the evidence was such as to sustain the 
dealer's contention quick adjustments were secured. 

Adjustment hy cooperation with jobbers^ clubs.— In May, 1901, a 
conference between the executive committee of the Iowa Implement 
Dealers' Association and the Manufacturers' Implement & Vehicle 
Club of Des Moines resulted in an agreement for cooperation in the 
adjustment of complaints and settlement of claims filed by members 
of the association against manufacturers or jobbers. A joint arbi- 
tration committee was also formed in Minnesota, composed of the 
grievance committee of the Minnesota Retail Implement Dealers' 
Association and five representatives of the Twin City Implement, 
Vehicle & Hardware Club, to confer on matters complained of by 
members of the dealers' association. A similar arrangement had been 
put in operation at Kansas City between the Kansas City jobbers' 
dub and the Western association, apparently as an outgrowth of a 
request of the officers of the Western association in 1905 for the co- 
operation of the jobbers in giving information to parties trying to 
secure goods at wholesale. An arrangement was effected under which 
the secretary of the Western association, after verifying the facts, 
notified the secretary of the jobbers' club of any cases that came to 
the attention of the former where persons who claimed to be imple- 
ment dealers and attempted to buy goods of any Kansas City jobber 
were proved to be what the dealers' association termed " catalogue 
agents." On receipt of this information from the secretary of the 
dealers' association, the secretary of the jobbers' club notified the 
members of that club in order to prevent the person claiming to be 
a dealer from going from one jobber to another. The secretary of the 
Western association always furnished the name of the jobber, so that 



i^ 






f 



^ 



^ I • 



m 



BESTRIOTIOK OF BETAIL TRADE TO BETAIL DEALBBS. 151 

the latter could verify the statements made. Moreover, it was ar- 
ranged that when a jobber learned of any one practicing such meth- 
ods of purchasing goods, he should notify the secretary of the job- 
bers' club, who in turn should notify all the members. No mention 
was made of this arrangement in conventions nor in the Bulletin, but 
it was claimed to be effective. In the several cases of this sort that 
arose the secretary of the jobbers' club notified each member of that 
club in the following form ; 

Gentlemen: In accordance with the resolution adopted by 
this club to cooperate with the Western association in prevent- 
ing sales of goods at wholesale prices to parties not entitled to 
same, you are requested to investigate before filling any orders 
for [here follow four blank lines for name of party and remarks] 
regarding whom a complaint has been made. Further particu- 
lars may be obtained from your secretary. 
Some of the jobbers' clubs appear to have been unwilling to enter 
into cooperative arrangements with dealers in adjusting complaints. 
The jobbers at Baltimore had gone on record as opposing any or- 
ganization of dealers. An article on the subject published in the 
Bulletin in February, 1907, read, in part, as follows: 

One report of this meeting states that the reason given -for 
the queer action taken was that organization places too great a 
power in the hands of dealers to " club " the jobbers into meeting 
unjust demands. They can not find a single instance to justify 
such an assertion. It has not been the policy of dealers' associa- 
tions to pursue any such unwise course. If it had been, their 
growth would not have been so great in the West during the 
past ten years. 
Subsequently the attitude of jobbing houses at Omaha toward 
dealers' associations led to some comment by an implement trade 
paper copied in the Bulletin in January, 1910. This read, in part, 
as follows: 

Indifference to the efforts of the men who are devoting their 
time and efforts to the betterment of their business associates 
and competitors however, is a short-sighted and unwise policy. 
While it is true that the associations have succeeded in checking 
certain practices indulged in by some manufacturers and job- 
bers, to their discomfiture, yet the outcome has proven to make 
for the interest of legitimate business on both sides of the line. 
Indeed, so true is this that the National Association of Agri- 
cultural Implement & Vehicle Manufacturers has put itself on 
record as being distinctly in favor of the retailers' associations, 
and its members and officers are working in harmony with the 
National Federation. Why, then, should the jobbers and branch- 
house managers pursue a different policy? 

"There must be mutuality, cooperation and reciprocity be- 
tween the two branches of the implement trade, or it will go 



^ 



152 PABM-MACHINEBY TRADB ASSOCIATIONS. 

hard with both. Let the jobbers follow the lead of the manu- 
facturers' association and there will be brought about an era 
of mutual good feeling which will amply repay the small sacri- 
fice entailed, instead of creating and widening a breach which 
bodes no good to either party. Let's be fair all around, gen- 
tlemen." 

Methods or adjustment used by Federation. — Complaints against 
individual manufacturers or jobbers referred to the Federation were 
handled in much the same manner as by the constituent associations. 
The secretary of the Federation endeavored to adjust such cases, and 
in those that he was imable to settle satisfactorily the manufacturer 
or jobber complained of was asked to appear before the delegates. 
It was felt that the Federation had a great advantage over the State 
associations in settling complaints, by reason of the fact that when 
a manufacturer or jobber was asked to appear before the Federa- 
tion he would understand that the dealer making the complaint had 
behind him the force of the whole Federation instead of a single 
association. 

The Federation at a convention in October, 1901, held an executive 
session for the purpose of conferring with certain manufacturers 
against whom complaints had been filed. It was reported that after 
listening to the evidence agreements were reached satisfactory to all 
concerned. The Federation also adopted resolutions providing for 
the manner of handling complaints referred to it by the constituent 

associations. 

The following case may be cited as an example of the method 
used by the Federation in adjusting complaints at about this time. 
In May, 1904, implement dealers around Fargo, N. Dak., organized 
the Fargo District Retail Implement Dealers' Association and re- 
quested the State association to assist it in eliminating direct selling 
by a certain drill-manufacturing company, and to request its mem- 
bers to stop buying goods of the company if such a course proved 
necessary. The North Dakota & Northwestern Minnesota association 
filed this complaint with the Federation. The latter took the matter 
up at a meeting in November, 1904. The secretary of the complain- 
ing association reviewed the evidence. It appeared that a representa- 
tive of the defendant company had issued a circular quoting whole- 
sale prices to consumers in the territory of the complaining asso- 
ciation. It was shown by the evidence that the circular was issued 
without authority or approval of the home office, and that the defend- 
ants had been requested to withdraw quotations and to give as much 
publicity to the fact that they did not approve of the action taken by 
their manager, as had been given to his circular. The secretary of 
the Federation then presented a letter just received from the defend- 
ants, also a circular which they had recently had printed and mailed 
to all of the dealers in the territory of the complaining association, 



BESTRIOTION OF BETAIL TRADE TO RETAIL DEALERS. 



153 



^ 



V 






which indicated a desire to adjust the case in accordance with the 
wishes of the complainants. This letter and circular indicated that 
their branch house in that territory would be immediately discon- 
tinued and that the trade in that locality had been notified of the fact 
and also of the fact that the defendants proposed to protect the trade 
to the fullest extent. It was shown that this letter and circular had 
been sent out immediately upon receipt of a letter from the secretary 
of the Federation giving notice that the case would be taken up at 
this meeting and notifying the defendants that they would be granted 
a hearing. In the settlement of this case it was voted as follows : 

That the secretary be instructed to advise the ♦ ♦ • com- 
pany that after a careful consideration of the complaint of the 
North Dakota and Northwestern Minnesota Implement Dealers' 
Association, we find that defendant's manager in said defendant's 
territory was guilty of a very great violation of trade ethics; but 
in view of their statements to this board, in which they disclaim 
any knowledge of the issuance of the circular which was sent to 
consumers quoting drills at wholesale prices, and promise an 
early discontinuance of their retail house in that territory, and 
give assurances that their policy will be one of protection to the 
established trade, thus recognizing the business code of honor 
which avoids trespassing upon the rights of the retailer while 
claiming his patronage, and have used their best efforts to give 
these facts as much publicity as was given to the circular sent 
out by their manager, this complaint has been dismissed as an 
incident closed. 

The Federation at this meeting recommended that where the 
manufacturer or jobber complained of had given satisfactory assur- 
ance of an intention, in good faith, to afford members of the Federa- 
tion adequate protection in the future, the case be suspended, and, if 
the promises were faithfully kept, that the complaint be withdrawn, 
as it was the policy of the Federation to secure the cooperation of the 
manufacturers and jobbers in protecting the retail trade in the fu- 
ture, rather than to insist upon the payment of commissions on sales 
already made. 

Apparently the Federation was not aggressive enough in prose- 
cuting complaints to suit the members of the Tri-State association.^ 
The president of that association at its meeting at Cincinnati in 
October, 1904, made a vigorous speech in regard to sales to irregular 
dealers, in which he is reported to have said : 

You know that were it not for the restraining influences of 
your association that irregular sales would flourish in these good 

*In 1901 a trade paper. In referring to the Tri-State Vehicle & Implement Dealers' 
Association, composed of dealers in Ohio, Indiana, and Kentucky, stated that that asso- 
ciation had developed amazing strength in protecting the dealer. It stated that one In- 
diana member had given information that he had received $65 in commissions from 
manufacturers who had sold vehicles direct to consumers in his vicinity, but that prior 
to the organization of the association he had been unable to obtain adequate commissions 
on such sales. 



154 



FABM-MAOHINEBY TRADE ASSOCIATIONS. 



States like the proverbial green bay tree. Time was when this 
was the condition of affairs, and unless you are on sentinel duty 
it will happen again. ♦ ♦ ♦ The obliteration of direct selling 
is what I consider the primary object of organizations like this. 

The secretary of the Tri-State association also criticized the Fed- 
eration as ineffective, and, in accordance with his advice, the associa- 
tion withdrew from the Federation,^ alleging that the benefits re- 
ceived did not warrant the payment of the annual dues. 

In order to discourage trifling complaints and to secure systematic 
and definite information in other cases, the Federation at its meet- 
ing in November, 1904, reconmiended that the secretary furnish the 
secretaries of the constituent associations with suitable uniform ques- 
tion blanks for use among their members in securing the desired 
information regarding complaints that were filed. The Bulletin, in 
April, 1905, announced that this blank had been prepared and that 
it should be used in reporting the facts of each irregular sale to the 
secretaries of the constituent associations. 

With regard to matters beyond the reach of the Federation, it 
was arranged that the joint board of dealers and manufacturers 
created in 1908 (see p. 136) should act as an arbitration board of last 
resort for the settlement of complaints. The Bulletin stated that the 
appointment of this board was a matter of great importance for 
which dealers' associations had been working a long time; that it 
would mean the adjustment of many complaints that would other- 
wise remain unsettled, and that it would be more satisfactory to all 

concerned. 

Court decision against methods used by Iowa Implement Deal- 
ers' Association. — ^In efforts to confine the retail trade to the retail 
dealer, none of the other associations appears to have gone so far as 
the Iowa Implement Dealers' Association in an attempt to prevent 
manufacturers and wholesalers from selling to farmers' cooperative 

stores. 

The matter of farmers' cooperative stores had been discussed by 
the Iowa association at least as early as 1900, at which time the fol- 
lowing resolution was adopted : 

That we have no fight to make against the so-called catalogue 
houses and cooperative societies, holding that they have the same 
right to seek a market for their goods as ourselves, but that, 
under no circumstances, will we allow goods of the makes and 
brands handled by them to be in our houses, thereby advertis- 
ing the wares they sell, and that, therefore, we will not buy from 
any jobber or manufacturer who sells to such concerns. And we 
expect and demand of our secretary and our trade papers that 
they keep us informed as to such sales. 







iTbe Trl-State aasodatlon subsequently rejoined the Federation. (See Exhibit 26.) 



eestbiction of betail trade to eetail dealbes. 155 

Some of the stores owned by the farmers' cooperative societies in 
Iowa had been handling farm machinery for several years. Owing 
to the activities of the Iowa Implement Dealers' Association, they 
experienced much difficulty in obtaining standard lines of imple- 
ments from manufacturers and jobbers. According to the Ketailers' 
Sentinel, an official journal published by the secretary of the Iowa 
Implement Dealers' Association, a manufacturing company whose 
name was given, canceled an order amounting to over $2,000 because 
of representations made to it by the Iowa Implement Dealers' Asso- 
ciation, and members of the latter association were requested by the 
paper to give the concern liberal patronage because of this action. 

In 1904 the Iowa Implement Dealers' Association filed a complaint 
with the National Federation against a firm of jobbers on account 
of sales to a store owned by a farmers' cooperative society. In 
referring to this case, the secretary of the Federation in his annual 
report for 1904 said : 

The defendants stubbornly refused to adjust, but finally wired 
me asking what was necessary to get right with the Iowa dealers. 
The claim for a commission was withdrawn, and a written 
promise secured that they would sell no more goods except to the 
regular trade. This was a satisfactory adjustment of the matter. 

Issue was precipitated early in 1904, however, on a complaint 
which was filed with the secretary of the Iowa Implement Dealers' 
Association by a member at Gowrie, Iowa, to the effect that certain 
manufacturers had sold farm machinery to a cooperative store at that 
place. Protest was made by the association to the manufacturers 
complained of, one of whom continued to ship goods to the coopera- 
tive society notwithstanding the protest. As a consequence, the fol- 
lowing letter, dated April 22, 1904, and marked " Confidential and 
for members only," was issued to the members of the Iowa Implement 
Dealers' Association by the secretary. The letter read as follows : 

Gentlemen: You are probably aware that there exists in 
Iowa organizations called farmers' cooperative societies. Their 
name signifies who compose them. They generally begin first, 
by handling grain and live stock. They then add lumber, and 
usually the next move is to begin handling implements and 
binding twine. 

They haveproven to be a detriment to the regular trade in 
implements, and this association has always protested against 
firms who sell to the regular dealer in Iowa, supplying them 

with their goods. ^ • t 

We have had complaints filed with us from Gowrie, Iowa, 
as one has recently started there called the Farmers Elevator 
Company. All firms have listened to our protests and acceded 
to our wishes in the matter except the Emerson Manufacturing 
Company of Rockf ord, lU. 



ir-l*i 



M 



liiii 



154 



FABM-MAOnmEBT TRADE ASBOOIATIONS. 



States like the proverbial green bay tree. Time was when this 
was the condition of affairs, and unless you are on sentinel duty 
it will happen again. * ♦ * The obliteration of direct selling 
is what I consider the primary object of organizations like this. 

The secretary of the Tri-State association also criticized the Fed- 
eration as ineffective, and, in accordance with his advice, the associa- 
tion withdrew from the Federation,* alleging that the benefits re- 
ceived did not warrant the payment of the annual dues. 

In order to discourage trifling complaints and to secure systematic 
and definite information in other cases, the Federation at its meet- 
ing in November, 1904, recommended that the secretary furnish the 
secretaries of the constituent associations with suitable imif orm ques- 
tion blanks for use among their members in securing the desired 
information regarding complaints that were filed. The Bulletin, in 
April, 1905, announced that this blank had been prepared and that 
it should be used in reporting the facts of each irregular sale to the 
secretaries of the constituent associations. 

With regard to matters beyond the reach of the Federation, it 
was arranged that the joint board of dealers and manufacturers 
created in 1908 (see p. 136) should act as an arbitration board of last 
resort for the settlement of complaints. The Bulletin stated that the 
appointment of this board was a matter of great importance for 
which dealers' associations had been working a long time; that it 
would mean the adjustment of many complaints that would other- 
wise remain unsettled, and that it would be more satisfactory to all 
concerned. 

CJOURT DECISION AGAINST METHODS USED BY loWA IMPLEMENT DeAL- 

BBs' Association. — ^In efforts to confine the retail trade to the retail 
dealer, none of the other associations appears to have gone so far as 
the Iowa Implement Dealers' Association in an attempt to prevent 
manufacturers and wholesalers from selling to farmers' cooperative 

stores. 

The matter of fanners' cooperative stores had been discussed by 
the Iowa association at least as early as 1900, at which time the fol- 
lowing resolution was adopted : 

That we have no fight to make against the so-called catalogue 
houses and cooperative societies, holding that they have the same 
right to seek a market for their goods as ourselves, but that, 
under no circumstances, will we allow goods of the makes and 
brands handled by them to be in our houses, thereby advertis- 
ing th6 wares they sell, and that, therefore, we will not buy from 
any jobber or manufacturer who sells to such concerns. And we 
expect and demand of our secretary and our trade papers that 
they keep us informed as to such sales. 

^ The Txl-8tate associaUoQ subsequently rejoined the Federation. (Bee Exhibit 26.) 



V 



'i • 



i '4 • 



■ 



il 



BESTRICTION OF KETAIL TRADE TO BETAIL DEALEBS. 155 

Some of the stores owned by the farmers' cooperative societies in 
Iowa had been handling farm machinery for several years. Owing 
to the activities of the Iowa Implement Dealers' Association, they 
experienced much difficulty in obtaining standard lines of imple- 
ments from manufacturers and jobbers. According to the Retailers' 
Sentinel, an official journal published by the secretary of the Iowa 
Implement Dealers' Association, a manufacturing company whose 
name was given, canceled an order amounting to over $2,000 because 
of representations made to it by the Iowa Implement Dealers' Asso- 
ciation, and members of the latter association were requested by the 
paper to give the concern liberal patronage because of this action. 

In 1904 the Iowa Implement Dealers' Association filed a complaint 
with the National Federation against a firm of jobbers on account 
of sales to a store owned by a farmers' cooperative society. In 
referring to this case, the secretary of the Federation in his annual 
report for 1904 said : 

The defendants stubbornly refused to adjust, but finally wired 
me asking what was necessary to get right with the Iowa dealers. 
The claim for a commission was withdrawn, and a written 
promise secured that they would sell no more goods except to the 
regular trade. This was a satisfactory adjustment of the matter. 

Issue was precipitated early in 1904, however, on a complaint 
which was filed with the secretary of the Iowa Implement Dealers' 
Association by a member at Gowrie, Iowa, to the effect that certain 
manufacturers had sold farm machinery to a cooperative store at that 
place. Protest was made by the association to the manufacturers 
complained of, one of whom continued to ship goods to the coopera- 
tive society notwithstanding the protest. As a consequence, the fol- 
lowing letter, dated April 22, 1904, and marked " Confidential and 
for members only," was issued to the members of the Iowa Implement 
Dealers' Association by the secretary. The letter read as follows : 

Gentlemen: You are probably aware that there exists in 
Iowa organizations called farmers' cooperative societies. Their 
name signifies who compose them. They generally begin first, 
by handling grain and live stock. They then add lumber, and 
usually the next move is to begin handling implements and 

binding twine. . 

They have'proven to be a detriment to the regular trade m 
implements, and this association has always protested against 
firms who sell to the regular dealer in Iowa, supplying them 

with their goods. ^ . x 

We have had complaints filed with us from Gowrie, Iowa, 
as one has recently started there called the Farmers Elevator 
Company. All firms have listened to our protests and acceded 
to our wishes in the matter except the Emerson Manufacturing 
Company of Rockf ord, IlL 



Ill 



156 



FABM-MAGHINEBY TBADE A8800IATI0KB. 



)i 



We learned that they had taken an order from this society 
at Gowrie for a half car of goods. We wrote them requesting 
that they withhold the shipment. While in correspondence 
with us they made the shipment and decline to do anything 
further in the matter. 

When this reaches you, we want you on Monday, April 26, 
1904, to write them a letter of protest in regard to their action. 
Please remember the date, as we wish these letters to reach them 
on, or about the same day. By doing this you will greatly 
oblige and at the same time show them something of the strength 
and influence of this association. 

If your answer, in your judgment, should be sent to this office, 
please send it or mail us a copy. 
In compliance with the request contained in this letter, many mem- 
bers of the dealers' association addressed letters of protest to the 
Emerson company, some of them threatening to give up the sale of 

its goods. 

Shortly thereafter the sales manager of the manufacturer wrote 
the president of the Iowa Implement Dealers' Association, saying, 
in part: 

Inasmuch as a few of our best friends among the dealers have 
expressed a desire that we do not sell these parties after our 
present contract with them expires, simply because the impres- 
sion prevails that they are a farmers' cooperative society, we 
have decided to respect their request 
The company appears to have sold no more goods to the Gowrie 
company at this time, but in 1905 its sales manager again wrote 
the president of the Iowa Implement Dealers' Association that 
his company had received another order for plows from the Farm- 
ers' Elevator Co., but had instructed its general agent in that ter- 
ritory not to make shipment until a reasonable time for the matter 
to be taken up with the dealers' association. This letter requested 
the president of the dealers' association not to make reply until 
he had fully considered the position in which he would place the 
Emerson company and the dealers' association by an unfavorable 
decision. The president of the association took the matter up 
promptly with a number of members, including the member located 
at Gowrie, from whom the complaint had originated. Later in 
the month the president of the association wrote the Emerson 
Manufacturing Co., summarizing several letters he had received 
from members in reply to his request for a statement of their ob- 
jections to the sale of goods to a farmers' cooperative society. The 
gist of these replies showed that the dealers' opposition was based 
upon the ground that cooperative stores, being organized to do away 
with the middleman's profits, sold at very small margins and no 
regular dealer could get business from the members unless he under- 
sold the society to the demoralization of trade. The letter of the 



> 



'% 

^ 



BBSTRICTION OP BETAIL TRADE TO BBTAIL DBALEES. 157 

president of the Iowa association to the Emerson Manufacturing 
Ca concluded as follows : 

We regret that you feel that we would single out your firm, 
and attempt to impose unjust demands, as we gather from your 
past letters to us, we only hope for your hearty cooperation m 
this matter, which is a vital matter to the implement dealer, 
it affects his existence in the future, and his prosperity at the 
present time. If other manufacturers and jobbers sell such 
concerns, they are not doing so, because we approve, and be- 
cause of some manufacturers selling such concerns, it should 
not excuse another manufacturer doing so, if the principle is 
wrong, and it is wrong, as we look at it. Our dealers associa- 
tions must take a firm stand upon this question, and we hope 
for your hearty cooperation. 
On September 25 the Emerson Manufacturing Co. wrote the 
Farmers' Elevator Co., of Gowrie, advising them that in view of all 
the conditions the company had concluded to stay out of Gowrie 
until different conditions prevailed there. 

Early in 1906 suit against the Iowa Implement Dealers' Association 
and its officers was filed by the Farmers' Elevator Co., of Gowrie, 
in the district court of Webster County, alleging that the complainant 
was unable to purchase implements because of the influence of the 
implement dealers' association upon the manufacturers, and asking 
an injunction to restrain the defendants from thus interfering with 
the complainant's business. Evidence in the suit indicated that pres- 
sure had been brought to bear upon various manufacturers not to sell 
their goods to the Farmers' Elevator Co., of Gowrie, and to other 
cooperative concerns in the State of Iowa. 

On October 12, 1909, a decree was entered on judgment for the 
complainant, under which the Iowa Implement Dealers' Association 
and all members were enjoined from interfering in any manner 
whatever with the business of the plaintiff. In reaching a decision 
in favor of the Elevator company the court found that the defend- 
ants had entered into an agreement for the purpose of impeding 
the business of the plaintiff and that they had threatened to prevent 
jobbers and manufacturers from selling to the plaintiff, causing them 
to violate contracts made with the plaintiff to the injury of the latter. 
The court further found that at the time of the commencement of the 
suit and at various other times the defendants published a journal 
called the Retailers' Sentinel, of which the secretary of the defendant 
association was editor. The court found that the association and 
the editor published in this journal a certain black-list notice of 
manufacturers and jobbers who sold to persons not satisfactory to 
the association, and that the object of this publication was to prevent 
the members of the dealers' association from dealing or trading with 
the manufacturers and Jobbers for the purpose of instituting an 



V 



I 



IM 



158 



FABM-MAOmKEBY TBADS ASSOOIATIOira 



unlawful boycott against such manufacturers and jobbers and to 
prevent the latter from trading or dealing with the plaintiff and 
others. This was held to be in restraint of trade. 

Changes in articles op association FouiOWiNO court decisions. — 
During the time that the case against the Iowa association was before 
the court the records of the various dealers' associations do not 
contain much information in regard to their activities in the ad- 
justment of complaints. Uncertainty as to the outcome of this suit 
and the pendency of suits against trade associations in other branches 
of trade seem to have caused the implement dealers' associations 
to proceed cautiously in their efforts to confine trade to regular 
dealers. 

Under date of March 4, 1908, secretaries of the constituent associa- 
tions of the Federation were cautioned in a general letter from the 
secretary of the Federation that developments in a case filed with the 
Federation had made it seem desirable to call their attention to 
the fact that they should use the utmost caution in the wording of 
their letters to wholesalers in regard to complaints which had been 
filed by members. This letter read, in part, as follows: 

Be very careful not to make any threats either direct or implied. 
Do not state that if they do not do so and so you will have 
to report the case to the National Federation for consideration 
and attention. One of our secretaries in a recent letter to a 
manufacturer did this, and the manufacturer was incensed and 
referred it to his attorney, who advised him that the writer 
could be prosecuted for using the mails to make a threat of 
that kind. Whether or not this is literally true, it is best to 
avoid trouble of this kind, and easy to do so. 

Let me caution you against demanding commissions, as the 
advice I have is that this can be construed as blackmail. You 
are doubtless aware of this fact, but I thought it would do no 
harm to mention it. Kindly acknowledge receipt of this. 

In October, 1908, the president of the Federation stated that he 
was led to believe that the members of local associations* were 
not giving sufficient attention to the filing of complaints, and that the 
constituent associations of the Federation were not making use of the 
Federation in this respect to the extent they should, the members 
fearing that they would be classed as "kickers" if they burdened 
their local complaint committees. The president expressed his be- 
lief that the settlement of claims strengthened the faith of the mem- 
ber in the value of the association to him. In April, 1909, the sec- 
retary of the Federation addressed a general letter advising the 
constituent associations to encourage their members to report ir- 
regular sales and urging the secretaries to prosecute the claims vigor- 
ously. In this letter the secretary of the Federation pointed out 

* In this connection, see pp. 102-168. 



# # 



^ 



* 



BESTEICTIOlSr OF BETAIL TRADE TO RETAIL DEALERS. 



159 



that every claim settled helped the cause of the dealers' associations 
and every complaint reported to the wholesaler made him more care- 
full in the future. 

In 1909 it was stated that practically all of the retail implement 
associations were maintaining systems by which the complaints of 
members against manufacturers and jobbers were taken up. 

One of the implement trade papers, in discussing the advantages 
that the dealer derived from belonging to an association, in the pro- 
tection he received as a result of association activity, pointed out 
that when a nonassociation dealer was hurt by a direct sale there was 
no one to whom he could appeal for redress except the offending 
manufacturer and jobber. On the other hand, it was shown that 
when the secretary of a dealers' association took up such matters 
in the name of the association for members, in many cases a com- 
mission was obtained and in other cases a positive promise was made 
that direct selling in that particular locality would cease. If the 
manufacturer ignored a complaint from the association or refused 
to discontinue direct selling, the case was taken to the National Fed- 
eration, which, it was stated, had been remarkably successful in 
curbing direct selling after offenders had ignored complaints of the 
State associations. 

In October, 1909, the president of the Federation expressed the 
belief that the Federation should seek close relations with the con- 
stituent associations in their work. He thought, furthermore, that 
claims should be forwarded to the secretary of the Federation, and, 
if found just, the power and influence of the Federation should be 
exercised to effect a settlement. If that proved impossible, the sec- 
retary of the complaint committee should be notified that the matter 
would be called to the attention of the Federation at its annual 
meeting, when the party complained of could appear and explain 
conditions. 

In a general letter issued to members of the Western association 
June 27, 1910, the secretary stated that the way to make the com- 
plaint department most effective was for members to report all 
irregular sales in their localities. He admitted that the association 
was not always successful in securing adjustments satisfactory to 
members, but pointed out that the fact that if a report was made 
it showed that the association was on the alert. He asserted that a 
repetition of the trouble rarely ever occurred. 

In- May, 1910, the United States Supreme Court handed down a 
decision in the case of the Grenada Lumber Co. v, the State of Mis- 
sissippi (217 U. S., 433) upholding the constitutionality of a State 
statute under which a decree had been rendered by the Supreme 
Court of the State of Mississippi dissolving a voluntary association 



\\\ 



160 



FABM-MACHINBEY TBADE ASSOCIATIONS. 



of retail lumber dealers, and holding that an agreement not to pur- 
chase from wholesale dealers who sold directiy to consumers 
amounted to a restraint of trade within the meanmg of the antitrust 

statute of that State. i. • i 

This decision was not altogether unexpected to the implement 
dealers' associations. Immediately after it had been announced 
dealers belonging to the associations were assured in the Implement 
Dealers' Bulletin that the decision did not in any way affect the 
associations of implement and vehicle dealers organized under the 
uniform constitution and articles of association prepared by the 
National Federation, under which rules no pledge was exacted from 
members not to patronize those who sold goods to mail-order houses 
or directly to the consumer. The secretary of the Federation also 
advised the secretaries of the various constituent associations to the 
same effect in a general letter. Apparently the situation was not 
free from some doubt, however, because in this letter the secretary 
of the Federation expressed the belief that there were some parts 
of the articles which it would be advisable for the association to 
eHminate at their next convention. Mention of the specific changes 
would be made in another general letter after the Federation had 
had time to act upon the matter. 

In this letter the secretary of the Federation also referred to a sug- 
gestion in a former general letter made immediately after a court 
decision in Nebraska, as to the best method of conducting the cor- 
respondence in complaints, namely, to the effect that the secretaries 
would do well to ask jobbers or manufacturers against whom com- 
plaints were filed if they desired information concerning reports 
coming to the secretaries in regard to shipments which they had 
made to parties who did not seem to be regular dealers. The sec- 
retary of the Federation assured the secretaries that, if they had 
such a request for the information, they would be perfectly safe in 
prosecuting the case. He did not think the secretaries would ex- 
perience any difficulties in receiving affirmative replies from all 
wholesalers. He advised the secretaries to file these replies where 
they could be easily referred to. This, he said, he mentioned simply 

as a safeguard. 

Prompted by the decision in the Mississippi case, the delegates at 
the annual convention of the Federation in October, 1910, recom- 
mended by unanimous vote that, as a precautionary measure, each 
association amend its constitution by eliminating the article relating 
to members reporting direct sales to the secretary of the association. 

(See p. 187.) 

The matter was brought to the attention of each of the s^retanes 
of the constituent associations, requesting them to embody this recom- 



r 



4\ 
# 1 t 



BESTBIOTION OF BETAIL TSABE ID BETAIL DEALERS. 



161 



mendation in their reports to the conventions of their associations. 
In this letter the secretary of the Federation said, in part : 

You of course understand that the Federation's action was 
simply recommendatory. The associations must take individual 
action, but this should be done in executive session. 

The secretaries were asked to notify the secretary of the Federa- 
ation, whether they would mention this matter in their reports, to 
withhold it from the press and to notify the secretary of the Federa- 
tion promptly if favorable action were taken. The secretaries were 
admonished that this " is a matter of great importance." 

At its annual convention in January, 1911, the Western associa- 
tion made the recommended changes in its constitution. Similar 
action was taken by the other associations belonging to the Fed- 
eration. 

At the convention of the Western association held at Kansas City 
in January, 1911, the secretary in his report referred to the matter 
of direct sales as follows: 

The subject of direct sales by manufacturers and jobbers con- 
cerns you perhaps more than any other. It is an evil you 
have to combat, and only by presenting a solid front is there 
hope of relief. It is the purpose of this association to point 
out to the wholesaler that to solicit the trade of the dealer upon 
the representation that he does not sell to the consumer, then 
to solicit the consumer's trade, is not fair. We concede the legal 
right of any wholesaler to sell direct if he sees fit, but we in- 
sist that to be fair he should declare his policy that all may 
know it, instead of claiming to be the dealer's friend, and at 
the same time making an occasional direct sale and giving as 
an excuse that he supposed the customer was a dealer. Develop- 
ments during the year made it seem necessary to enter a general 
protest against direct sales if we were to stand by the plank in 
our platform, which provides that to the retail dealer belongs 
the retail trade. The subject was carried up to the Federation, 
and made the chief subject of discussion at the conference held 
with the manufacturers' committee on dealers' associations. The 
committee admitted the justice of the dealers' position, but called 
attention to the fact that many manufacturers felt compelled at 
times to place their goods direct in order to introduce them, as 
dealers will not buy until demand is created. Consideration of 
this phase of the subject suggests the question of introductory 
price and making all deliveries through dealers. The phase of 
this direct sales subject which has caused your officers the most 
annoyance is the practice of withholding commissions to force 
contracts, not paying them unless agencies can be established. 
Your officers take the position that this is unfair and on a par 
with the practice of a class of wholesalers who make no pre- 
tensions to protect any except their own agents. The Federation 
carried the matter up to the manufacturers' association, and it 
was handled by that association in a spirit of fairness. Reso- 

68248-— 15 ^11 



162 FABM-MACHINEBY TRADE ASSOCUTIONS. 

lutions were adopted which place it squarely upon record as 
opposed to direct sales. With this explanation of the reason it 
was deemed best to revive the discussion of this subject at this 
time, I leave it for you to handle as you deem best 

There was considerable discussion of this subject among the mem- 
bers. Dealers with grievances of this sort were advised from the 
floor by other members to take the matter up with the secretary of 
the association. It appeared to be the sentiment of a number of the 
members that the competition of mail-order houses was not nearly 
so serious as the matter of direct sales by manufacturers and jobbers 
who usually sold through dealers. An effort was apparently made 
to have the members realize that they should not mention in the dis- 
cussion the names of any concerns that they thought were selling 
directly. The resolutions committee were directed to bring in a 
strong resolution on the subject. This read as follows : 

That direct sales to consumers by jobbers and manufacturers 
who seek to market their goods through the retailers are not 
justifiable, and that the practice should be wholly discontinued. 

At a meeting of the directors of the Western association in April, 
1911, the evidence in a large number of complaints was considered 
and a number of interviews were held with interested parties. It 
was reported that a majority of the cases were adjusted and the rest 
were continued pending further investigation. It developed that 
some of the complaints had been filed on account of shipments to 
the complainant's town, which the evidence showed had been made 
upon the order of dealers at neighboring towns. Accordingly, the 
directors adopted the following resolution : 

Inasmuch as a great amount of trouble occurs on account of 
dealers' ordering goods shipped direct to customers in neigh- 
boring towns, causing dealers in those towns to complain of 
the shipments, and giving to those who contemplate buying 
similar articles the impression that they can buy at wholesale 
price as they conclude their neighbors have done, we recommend 
that our members have all such shipments consigned to them- 
selves, giving their customers orders on the railroad agent at 
destination for the goods, and the secretary is hereby instructed 
to take the subject up with the jobbers of Kansas City with a 
view 'to securing their endorsement of the plan and their assist- 
ance in putting it into effect. 

Later in the year the secretary of the Nebraska association called 
the attention of the secretary of the Federation to the wording of 
certain sections of the articles of association recommended by the 
National Federation for adoption by local clubs of dealers. These 
sections read as follows: 



m 



91 



k^ 



EESTKICTION OF RETAIL TRADE TO RETAIL DEALERS. 163 

Article III. 

PROTECTION. 

Section I. One of our first duties will be to stand together 
and join with other association workers in protecting each other 
against irregular sales by jobbers, manufacturers and catalogue 
agents. 

Section II. Any commissions which may be collected on such 
irregular sales in our territory shall be turned into the treasury 
of the Club, and used for entertainment and other expenses for 
the benefit of all. 

The secretary of the Nebraska association stated that it had been 
called to his attention that the wording of the lumbermen's articles 
of association were not as strong as these. The secretary of the 
Federation immediately replied that the necessity of changing these 
articles had been entirely overlooked and that he would write to all 
the secretaries in regard to this matter at once. 

Another letter to the secretary of the Nebraska association from 
the secretary of the Federation, dated August 18, 1911, read, in part, 
as follows : 

I want to caution you about the manner in which you handle 
this complaint ^ to all others. Recent developments have shown 
the necessity for using care. You must understand that no 
threats can be made, either implied or direct, and even if you do 
not succeed in securing an adjustment all you can do is to dismiss 
the matter. You have absolutely no recourse under the law. I 
have tried to make this plain to all of our secretaries, and I 
hope they thoroughly understand it, and that none have made 
any mistakes. I know perfectly well what the temptation is, but 
you must remember that we are an organization of business men, 
and are not law breakers. We hope in the near future to have 
better information concerning the limit to which we can go in 
the conduct of such matters. I really believe that in this case 
your executive committee, when it meets the day before your 
convention, can secure an adjustment. Possibly it can be done 
sooner. 

Government investigation of protective activities of associa- 
tions. — In the early part of 1911 a series of questions concerning the 
work of the federated associations was propounded to the secretary of 
the National Federation by the Bureau of Corporations. This was 
mentioned by the secretary of the Federation in a letter to the sec- 
retary of one of the constituent associations in which he asserted 
that as soon as he could get his answers to the Bureau in shape they 
would be submitted to an attorney for suggestions. In this con- 
nection, he said in part : 

I mention this to impress upon you the absolute importance of 
the greatest care in the prosecution of your complaint depart- 

* Evidently referring to a case which had been mentioned in previous correspondence 
with the secretary of the Nebraslca associaUon. 



i 



164 



FARM-MACHINEKY TBADE ASSOCIATIONS. 



ment. We do not want any difficulty such as the lumber sec- 
retaries are having. Recent decisions and investigations make 
it hard to tell just where we are " at " and how far we can go as 
none of us desire to go contrary to the law. 
Writmg to another secretary a few days later, the secretary of 
the Federation expressed the opinion that the main thing for the 
Federation to take up was how the associations were going to 
furnish protection for their members against direct sales by whole- 
salers and yet keep within the bounds of the law. He characterized 
this is a hard proposition and suggested that it might be found nec- 
essary for the dealers to consult with a class of manufacturers whom 
they knew to be interested in seeing the trade protected as much as 
the dealers were. In this connection he stated that two prominent 
officials of the Federation thought that the annual meeting of the 
Federation in the latter part of 1911 should be held the same we6k 
as the convention of the manufacturers. 

About this time a representative of the United States Department 
of Justice visited the office of the secretary of the National Federation 
to examine its records. He also visited the office of the secretary and 
general manager of the National Implement & Vehicle Association. 
The latter, in writing to the secretary of the dealers' Federation, 
stated that he had given this representative the freedom of the office 
of the association, withholding nothing, and that he had endeavored 
unsuccessfully to learn who had filed complaint with the Department 
of justice, but presumed that it was some disgruntled concern who 
found they could not " straddle the fence " and sell both the dealers 
and the consumers at the same time. He stated that he had reported 
the matter to the chairman of the National Implement & Vehicle 
Association's committee on dealers' associations, who might discuss 
it at the Federation meeting in October. 

In replying to the above letter the secretary of the Federation 
advised the secretary of the manufacturers' association that the 
latter now knew the main reason why the Federation felt it neces- 
sary to hold its meeting at the same time that the manufacturers' 
association held its convention. (See p. 168.) The secretary of the 
Federation stated that he had withheld nothing from the (jovern- 
ment representative. In this letter he claimed to know who filed the 
information with the Department of Justice in the first place. He 
went on to say in part: 

If we can not conduct our association along the lines we have 
been pursuing then the retail dealers' lease of business life is not 
very long. There has never been a report sent to a member of 
the Western association, nor from the office of the Federation, 
to any member, concerning any jobber or manufacturer who has 
refused to protect the trade as we felt it should be protected. 



/ 



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m 



BESTRICTION OF BETAIL TBADE TO BETAIL DEALEBS. 165 

When we have been unable to convince them that our position 
was right we have simply had to drop it. The party who filed 
the information is one of those who could not be convinced and 
insisted that his goods should be marketed direct if he saw fit. 
I do not know what cause he has for thinking that any boycott 
has been established for there positively has not. The letters 
which I wrote them concerning the shipment which was re- 
ported to me I would be willing to let anybody see. When we 
could not secure an adjustment of the matter we, as stated 
before, dropped it. I undertook to have a friendly interview 
with this party during your St. Louis convention, but the inter- 
view was stopped abruptly. I will tell you more when I see you. 
This letter, my friend, is not for your files. I thank you for 
what you have done. I can not feel that we need worry over the 
outcome. We have not pursued such methods as the lumbermen 
are reported to have pursued. 

Under date of September 16, 1911, the secretary of the National 
Federation wrote the secretary of the Idaho Retail Hardware & Im- 
plement Dealers' Association as follows: 

I presume you know that nearly all retail dealers' associa- 
tions are undergoing an investigation at this time. If they have 
not reached the associations on the Pacific slope it is only be- 
cause they have been too busy in the East. It is hard for us to 
know how far we can go in this association work, but I sincerely 
hope the question will be cleared up before very long. It is 
coming to a queer pass when dealers are not permitted to even 
advise each other as to the business methods of others, and to 
consider if to trade with them is best, when at the same time the 
big concerns who are clearly violating the antitrust laws get off 
without the slightest molestation. So far as I know every asso- 
ciation in our Federation has been very careful. They have 
never used the boycott; neither have they ever used coercion 
in any form, and so far as I know no notices have ever been sent 
to the membership of any violation of trade rules by wholesalers, 
and if we are not allowed in our association work to try to secure 
protection through our members against direct sales by per- 
suasion and reasoning then we are indeed in a sad plight. If 
you are in Iowa in October I wish you could attend our Federa- 
tion meeting. It will be held in Chicago October 17, 18, 19 
and 20. 

Later in September, the secretary of the Federation, in a letter 
to the representative of the Department of Justice who had visited 
his office, explained the activities, purposes, and methods of the 
organized implement dealers as follows: 

I have thought best to send you a complete file of the general 
letters, except number one to five exclusive which I have been 
unable to locate. 

In this conection, it may be well for me to briefly explain the 
subject matter of some of the letters in writing along the lines 
heretofore explained orally. 



lil 






I 



166 FARM-MACHINERY TRADE ASSOCIATIONS. 

Number 18, in reference to a list of catalogue liouses, refers 
to an effort made by my office to secure such a list so that I might 
always be able to ascertain at once whether it was worth while to 
take up complaints. I could not know all the manufacturers and 
jobbers. Sometimes in taking up a complaint with an imknown 
house, upon the. supposition that their policy was in line with 
that of the trade in general and that the claim might therefore 
be adjusted, I would learn that I was wasting effort with a con- 
cern whose fixed policy was otherwise. * However I found in 
an effort to compile this list that it was so extensive as to make 
it impossible to keep it complete and therefore it was abandoned. 
Letters 19 and 20 pertain to the information bureau which 
died a bornin', except the maintenance of the formal organiza- 
tion. A great many members had expressed a desire to be able 
to ascertain promptly as to whether any given manufacturer or 
jobber, practiced the policy of shipments direct to consumers, 
and possibly some other information that I do not recall as being 
so desired. We were advised that we might legally compile 
such information and furnish to those who requested it; but that 
we should not voluntarily disseminate such information gen- 
erally. In order that we might know as to how far such in- 
formation was really desired and to give all our members equal 
opportunity in any of our activities, this bureau was organized 
and blanks sent to the members for signature if they desired to 
take advantage of it. The conclusion was reached that work 
along that line was not sufficiently desired or desirable, and the 
idea was dropped without ever being put into operation. 

A number of letters refer to the prosecution of complaints. 
As I have explained to you, the association has endeavored to 
benefit its members and secure their support, adlierence and in- 
terest by acting as an intermediary in the adjustment of com.- 
plaints. It has always been the theory of the association of 
which I have been secretary, and federation, that the best results 
could be obtained upon the theory of cooperation between job- 
bers and manufacturers on the one hand and dealers on the other 
on the basis of mutuality of interest ; that they desired to do 
business under advantageous conditions for their own profit; 
and that, as far as jobbers and manufacturers are concerned, 
they generally regard the local dealer as the best medium of 
distribution and that a local dealer who prospered through good 
methods distributed more goods and paid his bills more 
promptly ; so that it was to their mutual interest to have agree- 
able relations and methods of dealing just to all concerned. On 
this idea, the association has argued general principles through 
its conference committees and handled special complaints 
through its secretaries, using such arguments and persuasion as 
it thought would appeal to the judgment of the manufacturer 
and jobber. As to complaints, it has believed that the majority 
of manufacturers preferred to be advised of and to adjust, where 
equitable, matters tending toward irritation of the local dealer 
or the demoraHzation of his business. Complaints of local 
dealers have been urged vigorously on this theory, and results 
sought to the end of doing justice to the local dealer and attach- 
ing him to the association. Where (as you must recall from the 



RESTRICTION OF RETAIL TRADE TO RETAIL DEALERS. 167 

complaint files thrown freely open to you) arguments as to 
mutual interest and proper trade principles did not avail, 
a complaint was dropped and dismissed and the member 
was advised, even though, as we regret to say, we have suf- 
fered severely in our membership from time to time because 
the members whose complaints were not adjusted felt that non- 
adjustment was due to failure of the association to take a more 
vigorous stand. Not only has the association of which I am 
a member abstained from any suggestion to wholesalers other 
than appeals to their good judgment and sense of trade equity, 
but the federation has cautioned the secretaries of other con- 
stituent associations not to do so, not only because of doubtful 
legality but because it was not good business policy. See letter 
of March 4, 1908, a copy of which was made for you when you 
were in Abilene but which you in some way overlooked in get- 
ting the large amount of data together. 

You asked me in reference to our reporting to our members 
though circulars or constituent associations, or even by furnish- 
ing information to certain papers, wholesalers whose methods 
did not accord with the judgment of the federation as to business 
policy. We have never done anything of that kind. The only 
instance in which we have taken any action in such a matter 
was to correct a wrong I believed was being done to manufac- 
turers and is found in letter 34. Inquiries indicated that the 
Banner Buggy Company had been misrepresented in a trade 
paper, and we did what we could and what we thought was right 
to all parties, to correct what we believed to be a false report, 
although I had had no correspondence regarding the matter pre- 
viously, and in fact, knew nothing regarding it until my atten- 
tion was called to the report in the paper. 

Sometimes in expressing in correspondence a thought per- 
fectly clear to the writer, the thought as expressed is not per- 
fectly clear to the one not viewing the language from the point 
of view of the writer's conception of the subject. If there is 
anywhere in any of these communications anything that you do 
not understand clearly, it will give me pleasure to endeavor to 
make it clear upon any request from you. 

And this suggests to me that I repeat here the request made to 
you orally that in making your report, you embody a request 
from us that we be advised what, if anything, in the constitution 
or operation of our federation the department regards as im- 
proper in any way, so that we may make proper corrections. 
We have operated on the theory that there was a legitimate field 
for furthering the mutual interest of wholesale and retail dealers 
in building up the business along the best lines for all concerned 
by improving methods, exchanging information and opinions 
upon matters of general interest and as to specific cases. If 
there is any particular in which we have exercised bad judgment 
in seeking to attain that general purpose or in specific niethods 
adopted, there is nobody more anxious to be advised of it than 
ourselves. 
The secretary of the Iowa implement dealers' association referred 
to the investigation of the Department of Justice in a letter written 



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168 



FABM-MAOHINERY TBADE ASSOCIATIONS. 



it 



II 



to the secretary of the Federation October 6, 1911, in which he said 
in part : 

I don't fear for the results as I know that we have been as 
careful as it is possible to be. I think, however, that this situa- 
tion should be presented in detail and should be gone over care- 
fully at the Federation meeting, in order that the situation may 
be presented intelligently by the delegates to the various organi- 
zations in annual convention. If the rank and file have a clear 
understanding of the situation matters can be handled much 
better. 

The secretary of the Federation in his reply stated that he felt that 
what they had to fear was the overanxiety of some official to make a 
record. He asserted: 

We have been as careful as any one could be and if we are not 
permitted to conduct our work as we have done then we will 
have to disband and let the mail order houses take the business. 

Just before the convention of the National Implement & Vehicle 
Association and the annual meeting of the Federation in October, 
1911, the secretary of the latter wrote the chairman of the commit- 
tee on dealers' associations of the National Implement & Vehicle 
Association in reply to a letter from the former, suggesting a date 
for a conference between the manufacturers' committee and the Fed- 
eration at that time. In his reply the secretary of the Federation 
stated as follows : 

I do not know that we have anything special to take up with 
your committee except the all important subject about which I 
wrote you recently and which will be the chief topic for dis- 
cussion at our meeting. Upon the outcome depends the very 
life of associations. I do not believe that the class of manufac- 
turers who want to market their product through the dealers 
want to see such chaotic conditions prevail as would if no re- 
straint whatever is thrown around the business. 

• When the delegates to the Federation met at Chicago October 17, 
1911, the president in his address suggested that the existing agita- 
tion against the middleman had resulted in making the implement 
dealers cautious, and that the results of Government investigation 
and the action of the governmental authorities in dissolving and re- 
adjusting many of the large corporations were such as to make the 
dealers scarcely know where they stood. In this connection he said : 

We find that it is almost against the law to meet and to consult 
together and talk over matters. 

He was of the opinion that the talk against the middleman was for 
political purposes. He said : 

The real fact is that a selling organization is very necessary 
in order to market various products in this country and results 
often in advantage to the consumer as well as a higher price 
to the producer. 



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W~^^€ 



BESTRICTION OF RETAIL TBADE TO RETAIL DEALERS. 169 

One of the principal matters discussed at the meeting was the sub- 
ject of direct selling and whether the retail dealer is a necessary 
part of the machinery of distribution. This was discussed before 
the arrival of the manufacturers' committee, the opinion of the deal- 
ers present being that the manufacturers should recognize the dealer 
as the proper medium of distributing their goods. When the manu- 
facturers arrived this was one of the subjects presented to them by 
one of the dealers present. In replying one of the manufacturers 
stated that the manufacturers and dealers should cooperate and that 
the manufacturer should protect the dealer against direct selling 
as far as possible. Another manufacturer took the position that the 
existence of the retail dealer is absolutely essential to the existence 
of the small manufacturer, and if the retail dealer should go out 
of business the small manufacturer would be compelled to do the 
same. The same manufacturer in addressing a meeting of the Illi- 
nois implement dealers on the same subject had spoken as follows : 

Men, I want to tellyou that we are on trial as retail implement 
men before the public, as to whether or not there is a necessity 
for our existence. The question to be decided is, as middlemen, 
have we imposed a cost of doing business that is too big a bur- 
den for our business to bear? Is there a cheaper method? If 
there is, and if that method is equally efficient, you may be just 
as sure as that you sit here that the extravagant plan must go. 
This is a question which is not alone one of economics, but 
which is likely to be as well one of politics. What we lack is 
the means for an organized effort to combat the antimiddleman 
publicity. 
The chairman of the manufacturers' committee on dealers' asso- 
ciations and arbitration, in reporting to the manufacturers the pro- 
ceedings at the conference of that committee with the dealers' Fed- 
eration, affirmed that the members of the National Implement & 
Vehicle Association believed in the desirability of confining the retail 
trade to the retail dealer as the best method of distributing goods. 
He said in part : 

Now while we can all agree, that the necessary factors in a 
practical and successful implement business, are the factory, 
the traveling salesman, or the jobber and the retail dealers, yet 
we must recognize that there is strong opposition to this plan. 

For years, the mail order houses and the direct selling fac- 
tories have tried to impress the farmers with the advantage of 
buyin^y from them, but they have not been so very successful. 

JLn tlie past two years, the mail order houses have bought some 
implement factories, and are controlling others. They will there- 
fore make further and somewhat more plausible representations 
to the consumers. Their chief argument is, that they cut out the 
dealer, and give consumers the benefit of his profit. In some in- 
stances they make a specially low price on some one implement, 
and thus try to convince the farmer of their ability and resources 



170 



PAKM-MACHINERY TRADE ASSOCIATIONS. 



ii 



1). 



1 ' 



1 1 



on other things. Kecently some State prisons have been trying 
to make twine and implements. 

Then, more recently, we have heard of the " Anti-Middle Man 
Association," and of those who say they " don't want anybody 
between them and the producer." And recently, the Department 
of Justice, doubtless at the suggestion of the mail order houses, 
has been investigating the dealers' associations, to see if they have 
been guilty of any illegal acts. 

In short, there is quite a widespread inquiry as to the neces- 
sity and advantage of various methods of conducting business; 
and this has reached the implement industry. Our methods are 
on trial, not only the factory methods, but the dealers as well. 

In other words, the present methods of conducting the imple- 
ment business are up for consideration, and we have to prove the 
* wisdom, the efficiency and the economy of our distributing sys- 
tem, if it is to be continued. 

So that in our opinion, we as manufacturers, must closely 
scrutinize our own part in this system, cut out all unnecessary 
expense, stop all leaks and waste, and get down to bed rock in 
our costs oi making and selling; and the dealer must do the 
same ; handling suflicient lines to keep him busy all the year 
round, and have actual knowledge of what it costs him to do 
business — then have the courage to add to this baying price, and 
make a profit besides. 

There must be the closest kind of cooperation between dealers 
and factories, in a serious and continuous effort to reduce the 
cost of distribution to the consumer; and at the same time, we 
will have the advantage of furnishing the farmer, by far the 
best machines he can get, of being on the ground to take care of 
-him when in trouble, and of the personal acquaintance and 
friendship between farmers and dealers. 

The members of the National Implement & Vehicle Association at 

this time adopted the following resolution on the subject of retail 

dealers' associations: 

Whereas, The policy of the members of this association is to 
market their product through the retail dealers, and 

Whereas, The retail implement dealers' associations are con- 
stantly working for the improvement of the conditions of their 
members, 

Therefore, he it resolved, That this association heartily en- 
dorses the general policy of the retail implement dealers' asso- 
ciatipns, and the National Federation of Retail Implement and 
Vehicle Dealers' Associations, and will continue to cooperate 
with them in all legitimate efforts to improve the condition of 
the trade and through the dealers to supply the farmers with the 
best farm implements and equipment in the world, and at the 
lowest practical cost consistent with first-class implements and 
constant improvements. " 

The Federation in its resolutions reaffirmed its position that — 

"To the retail dealer belongs the retail trade." The live, 
honest, energetic, retail implement, vehicle and hardware dealer 
is the best friend the farmer ever had. By reason of his location 



r 



RESTRICTION OP RETAIL TRADE TO RETAIL DEALERS. 



171 






» t'4 



and experience he is qualified to render to his customer such 
services as can be had through no other channel and from no 
other source. By such service to his community he has well 
earned the position which he is proud to maintain. The retail 
dealer is the connecting link between the manufacturer and con- 
sumer. His facilities for taking care of the manufacturer's in- 
terest and of rendering practical service to the consumer make 
him the natural and by far the most economical channel for the 
distribution of manufactured products. 

We, therefore, reaffirm our position that "to the retail dealer 
belongs the retail trade," and maintain that the manufacturer 
who solicits the trade of retail dealers should afford them loyal 
and adequate protection in the sale of his goods. 

"•^ Shortly after this meeting of the Federation and its conference 
with the manufacturers' committee, the secretary of the Federation 
replied to a letter from the publisher of an implement trade paper 
who had apparently inquired concerning the situation. In his reply 
the secretary said, in part, as follows: 

Answering your inquiry concerning the investigation will say 
that nothing new has developed. A special agent of the Depart- 
ment of Commerce and Labor attended every session of our con- 
vention, also every session of the manufacturers' convention, and 
we were glad to give him permission to do this. We talked just 
as freely regarding matters connected with our work as we 
would had he not been there, for we have nothing to keep back. 
We have committed no act in violation of law. We have an- 
tagonized no one, and have been doing as we supposed and still 
think just as our friends the jobbers wanted us to do, namely 
cooperating with them in an effort to place the implement busi- 
ness upon a better basis. How veil we have succeeded is evi- 
denced by the loyalty of a large membership and the endorse- 
ment of our methods by a great number of jobbers and by the 
manufacturers in a strong resolution adopted unanimously at 
their recent convention. 

We are very grateful to those who very promptly responded 
to our request for a letter setting forth the fact that our associa- 
tion had been conducted along conservative lines and had been 
a real help to all classes of the implement trade and that they 
were in sympathy with us and approved of our methods. It 
is also gratifying to note the willingness shown by the manu- 
facturers to respond, and the character of the letters they have 
written should dispel any thought in the minds of Government 
officials that the manufacturers felt that we were antagonizing 
them in the slightest degree. 

It is true that I have written to a number of jobbers, and in- 
terviewed others, requesting a letter setting forth the fact that 
it is their desire that implement dealers' associations be allowed 
to continue their work along lines which have characterized it in 
the past. This was first suggested to our board of directors by a 
letter written by one of the largest jobbers in Kansas City. 
Hearing of this I asked for a copy of same, and it set forth so 
forcibly the contention we ourselves had made that I brought it 



i 



172 



FABM-MAGHINERY TBABE ASSOCUTIOITS. 



11^ 



to the attention of the hoard of directors, and the advisability 
of securing other letters of similar character was then suggested. 
We assumed of course that all would be as willing as this jobber 
had been to do this, and as before stated, I have received a great 
number of very fine letters which can not but fortify the posi- 
tion we have taken. 

Plan of handling oomflaints in isii and 1912. — After the 
decision of the dealers to eliminate certain portions of the uniform 
articles of association imder which the constituent associations (see p. 
160) had been organized, the secretary of the Federation, in a letter 
to the secretary of the New York Ketail Implement & Vehicle Dealers' 
Association, stated that all of the other State associations had elimi- 
nated all of article 6 (see p. 161) , as the officials did not want anything 
in the association work that was in the slightest degree in conflict with 
the antitrust law. He cautioned the secretary of the New York asso- 
ciation that reports of irregularities sent to members were not per- 
missible, and asserted that in the 23 years which he had been in the 
work (as secretary of the Western association, part of the time as 
secretary of the National Federation) he had never notified the 
membei^ip of irregularity in the conduct of the business of any 
manufacturer or jobber. He continued as follows : 

In prosecuting complaints we simply try to make the whole- 
saler see that the dealers need their protection. The law has 
been such that we could not use any coercion and we must recog- 
nize that fact. This undoubtedly has been a handicap to you 
and to all other secretaries, but nevertheless it must be observed. 

The question of the best method to be used in handling complaints 
was brought up a little later ii^a letter to the secretary of the Federa- 
tion from the secretary of the Minnesota association, in which he 
wrote as follows: 

I wish your advice in inserting the following in our conven- 
tion program. I ask this in view of the investigation now being 
made of our associations. 

"Important. — ^The arbitration committee will be in session 
in their committee room, adjoining convention hall, for the pur- 
pose of hearing complaints from any member. No complaints 
or grievances will be allowed on the floor of the convention. 
The arbitration committee will hear your trouble and report it 
. to the convention in executive session, Friday afternoon." 

I wish to head off any attempts on the part of our members to 
air their grievances during an open session of the convention 
and further to handle the matter entirely through our arbitra- 
tion comimittee. 

A prompt reply is earnestly requested as I am now at work 
on our convention program. 

To this letter the secretary of the Federation replied as follows : 

I am in receipt of yours of 24th and replying will say that if 
I were in your place I believe I would say nothing about the 



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BESTRIOTION OF RETAIL TRADE TO RETAIL DEALERS. 173 

work on the arbitration committee. If you put this on your 
program you may be reasonably certain that a representative of 
the Department will be on hand and will ask you the privilege 
of attending all of your sessions, including the executive ses- 
sion. * * * You are absolutely right about not allowing 
any grievances to be discussed on the floor of the convention. 
If you want to say on your program that the board of directors 
will be in session at a certain time and if members have any 
matters they wish to take up with them that is the time to do it, 
I can see no objections, but I would not say that the committee 
will make a report in executive session. You might just as well 
print it so far as the position the Government will take is con- 

cerned. 

I believe I am right about this, Mr. Buxton, but if you think 
I am not and will point out wherein you think I am wrong I 
will be more than glad to hear from you. We would better be 
too careful during these parlous times than not careful enough. 
I heard when in Kansas City this week that the cases against 
the lumber secretaries had been dismissed. I notice by the daily 
papers that they have filed their case against the lumber asso- 
ciations in Minnesota. If you can secure any information I will- 
be glad to have you write me. 

The policy which the secretary thought the associations should' 
pursue in their efforts for protection was indicated in a letter to a 
member of the Western association in December, 1911. In this letter 
the secretary said in part : 

Our association can not change the policy of any manufac- 
turer. Its province is to ascertain what said policy is, but we 
can not compel them to pay anyone a commission upon any 
direct sale they are pleased to make. * * * I want to call 
your attention to the fact that matters of this kind must be 
handled in such a way as not to lay us liable in any way under 
the antitrust laws and I have conducted the affairs of this office 
in that way from the start and do not propose, if I can help it, 
to put myself in the position that some of the secretaries in other 
lines have done. I expect to meet the manager of the * * ♦ 
Wagon Company in Kansas City during convention and believe 
that if it were possible to arrange an interview between you and 
him we could get this adjusted very quickly. At any rate, I 
want the opportunity of explaining to you just how far we can 
go in such matters. I repeat that if it is their policy to sell 
their goods direct, we can not compel them to change it. Write 
me if you will meet me at the convention. 

During the summer of 1912 the secretary of the Western associa- 
tion, who was also secretary of the National Federation, in an oral 
statement to an agent of the Bureau of Corporations, defined the 
manner in which complaints against individual manufacturers and 
wholesalers were then being handled by the association. He stated 
that when a complaint was received from a member of the Western 
association in regard to sales to an irregular dealer or directly to a 






174 



FABM-MACHINEBY TKADE ASSOCIATIONS. 



F» 



fii 



consumer the usual method was for the secretary of the association 
first to attempt £o settle the matter by correspondence with the 
offending manufacturer or jobber. The secretary wrote asking if 
he wished to receive information concerning complaints which might 
be lodged with the secretary regarding his methods of selling. The 
reply of the jobber or manufacturer was usually that he would be 
glad to have such information. Thereupon the secretary stated the 
case, and if the matter could not be adjusted by correspondence it 
was taken up at a meeting of the board of directors of the Western 
association, at which meeting the manufacturer or jobber was re- 
quested to be present to state his policy. According tc the secretary, 
if, at this meeting, the jobber or manufacturer said that it was his 
policy to sell to anyone who would buy, the board of directors at once 
considered him a direct seller. If he announced his policy to be one 
of protection to dealers, the matter was adjusted either by his paying 
a commission to the dealer in whose territory the sale was made, or 
sometimes dropped, upon an agreement of the offender to discontinue 
such sales. A great majority of the complaints related to irregular 
dealers. A case which could not be settled by the board of directors 
was referred to the Federation, but the secretary stated that these 
cases had been few. In this connection, he asseited that the secre- 
taries of the constituent associations referred to the Federation only 
those cases which involved some important principle^ as the Federa- 
tion took the position that it had something else !<.• attend to than the 
specific complaints of individual dealers. 

Furthermore, the secretary stated that the only place where the 
dealer could air a grievance against a particular manufacturer or 
jobber was at executive sessions of the association, but he claimed 
that these sessions had been discontinued by the Western association. 
He stated that the purpose of the executive session had been to let 
the dealers know who were loyal to them. He stated that the last 
executive session of the Western association was held in 1909 or 
1910, although it has been on the program since that time. In such 
session the secretary reported the number of complaints and usually 
the name of the manufacturer or jobber involved. The secretary de- 
clared that he had never in open session given members the names 
of direct-selling concerns as a matter of general information, but in 
the executive sessions there was no such limitation. He asserted, 
however, that in recent years the executive sessions have been given 
less and less to the matter of specific complaints, as the dealers feel 
that they have won their point and that in very few instances do 
manufacturers and jobbers sell directly. He claimed that very 
rarely did a manufacturer or jobber appear before the executive ses- 
sion, most of the work of adjusting complaints being done by the 
board of directors of the Western association meeting with indi- 






BESTRICTION OF RETAIL TRADE TO RETAIL DEALERS. l75 

vidual manufacturers or jobbers to talk over the complaint. The 
great bulk of complaints which the secretary could not settle by cor- 
respondence was adjusted in this way. The secretary asserted that 
the statement could not be made too strong that he had at no time 
supplied data to implement trade papers concerning direct selling. 

The secretary denied that the association had ever attempted to 
limit sales by wholesalers only to members of the association, any 
regular dealer being recognized as entitled to wholesale prices from 
the jobber or manufacturer. He said that the association had never 
attempted to prevent a new dealer from going into business pro- 
vided he proposed to carry a stock and make his living from the 
business. It was the man who sells from a catalogue, who does not 
expect to make any profit on his goods, that the association objected 
to. In this connection, he expressed the belief that the antitrust 
laws should be amended so as to permit the secretary of a dealers' 
association to notify all of its members in regard to direct sales by 
certain manufacturers. (See p. 202.) He claimed that all that could 
be done under existing law was to notify the individual dealer who 
inquired as to the selling methods of the manufacturer or jobber in- 
quired about, or to reply to a question from a manufacturer or jobber 
as to the standing of certain concerns said to be dealers. 

Negotiations with manufacturers relative to farmers' coopera- 
tive STORES. — ^The method of handling complaints by the Minnesota 
association in 1911 (see p. 172) is shown in the case of a complaint 
filed with the secretary of that association by a member who reported 
that a wholesale house at Minneapolis, whose name was given, had 
made a shipment of certain specified implements to a store conducted 
at his town as a farmers' cooperative enterprise. This member wrote 
the secretary of the Minnesota association as follows : 

Kindly take this up at once with the above named firm and 
cut such business methods short, while still in its infancy. 
There is no reason they can offer for making such shipment, as 
the above concern at this place, receiving the goods, handle only 
groceries and dry goods. I trust you will be successful in getting 
the * * * Co. to see the error of their ways, and that we 
may have no further trouble from this source. 

The secretary acknowledged the receipt of this letter and appears 

to have followed the advice of the secretary of the Federation in 

opening correspondence with the wholesaler by asking if the latter 

desired to know of complaints filed against him. The secretary wrote 

as follows: 

I frequently receive information from members of this asso- 
ciation concerning shipments made to their towns by wholesalers 
to parties who carry no stock of implements or vehicles what- 
ever, which they have reason to believe were made under a 
misapprehension of th3 facts, and I would like to know if you 
wish us to advise you when such information concerns you. 



176 



FABM-MACHINEBY TBADE ASSOCIATIONS. 



I 



I 



» 



The reply of the manager of the wholesale house at Minneapolis, 
dated March 10, read as follows: 

Keplying to your favor of March 8, we shall consider it a 
favor if you will notify us of any cases where we are shipping 
machinery under a misapprehension as to the propriety of so 

doin[^. 

It is our aim to sell nothing but the best class of dealers as 
we feel that it is as much to our own interest as to that of the 
trade, to discriminate closely. 

Thereupon the secretary of the dealers' association wrote as fol- 
lows : 

Answering your letter of the 10th inst., I find that you have 
made a shipment of the following goods: One checkrow com 
planter, one boss harrow, two walkmg plows, to the Farmers 
Co-op Merc. Co., of * * * 

The Farmers Co-op Merc. Co. of * * * are not imple- 
ment dealers, and it is to be assumed that these goods were 
ordered through this company for one of the farmers interested 
in the Merc. Co. 

The Farmers Co-op Co. of * * * handles only groceries 
and dry goods, and the fact that the shipment was so small indi- 
cates tnat they have no intention of engaging in the implement 
business. I find that where farmers' elevators and stores are in 
operation, the members of this association often endeavor to 
secure implements at wholesale by getting the manager of the 
company to order these for them. 

I must say that the Minneapolis jobbers as a rule, refuse to 
fill these orders, but occasionally through oversight, a shipment 
of this kind is made, but I find that when the wholesalers at- 
tention is called to the matter, shipment of this character imme- 
diately ceases. I would like to have you go on record regarding 
this shipment, and let us dispose of this complaint before we 
have occasion to refer it to the arbitration committee of the Twin 
City Implt., Vehicle & Hdwe. Club and our own arbitration com- 
mittee, who hold a joint meeting in Mpls. April 4. 

I assume that you would not care to have these matters 
brought up at this meeting, but would prefer to settle it direct 
with this office, thereby avoiding any publicity. 

The wholesale house, on March 13, wrote, showing what goods 
had been shipped, and stating that the shipment was made upon 
the representation of their salesman that the consignee was engaging 
in the implement business. They wrote again on March 20 that they 
had investigated and were satisfied the farmers' cooperative com- 
pany in question was conducting a legitimate business, and they 
went on to say: 

We are also informed that the person who made the com- 
plaint has made similar complaints in the past against other 
firms that endeavored to obtain a foothold at * * *, and 
that ha is a notorious price cutter when it comes to driving legiti- 
mate competition out of town. He is said to be fixed financially 



EESTBICTION OF RETAIL TRADE TO RETAIL DEALERS. 



177 



A 



SO that he can afford to make whatever prices are necessary to 
force his competitors to the wall. 

Should you publish in your official organ, any correspondence 
on this subject, we should be pleased to have you include the 
entire correspondence, together with this letter. 

The secretary of the dealers' association wrote, on March 21, as 
follows: 

Replying to your letter of the 13th, re Farmers Co-op Merc. 
Co. * * ♦ I wish to take exception to that portion of your 
letter wherein you say " This shipment was made by us on the 
representation of our salesman that these people are engaging in 
the implement business and judging from the fairly complete 
line of samples which they have ordered, we believe that we 
could not be criticized in honoring their order." 

You know that the quantity of goods shipped * * * does 
not indicate that these people are engaging in the retail imple- 
ment business, and it is preposterous to assume that any such 
thing is likely to come to pass. 

The name of the company should be sufficient to arouse your 
suspicion that these goods were ordered specially for some 
farmer forming this concern. 

It seems strange that large wholesalers such as your company 
should so far forget the ethics of the implement business as to 
fill an order like the one in question, and then excuse the matter 
as you do in that portion of your letter quoted above. I know 
and you know that in this present day no man can engage in the 
retail implement business legitimately without carrying a stock 
on hand, amounting from $2,000 up. In fact, the better class 
of dealers carry from $4,000 to $10,000 in stock. 

Assuming that you wish to be fair in this matter, I am going 

to request that you make an investigation of these parties and 

unless they are willing to place an order with you for one or 

• more cars of goods, embracing a complete line, that you refrain 

from shipping any more goods to them. 

A joint meeting of the arbitration committee of this associa- 
tion * * * will be held with the arbitration committee of 
the Twin City Implement, Vehicle & Hdwe. Club on Tuesday, 
April 4, and unless we can get this complaint closed before that 
time, I shall have to refer the matter for adjustment to this 
committee. I assume that you would not care to have your 
name before this committee and hope I can get a definite prom- 
ise from you before this April meeting not to ship any more 
goods to the * * * people. 
The case was brought to the attention of the joint arbitration com- 
mittee mentioned in the correspondence, but nothing further seems 
to have been done about it. In an interview with an agent of the 
Bureau of Corporations at about this time the chairman of the 
jobbers' committee on arbitration stated that he had no knowledge 
of any case where the dealers' association had actually notified its 
members that any jobber or manufacturer was unfair. 
68248**— 15 ^12 



■I 



178 



FAEM-MACHINEBY TEADE ASSOCIATIONS. 



I 



Another Minneapolis jobber, however, stated that he gave up an 
agency with another farmers' cooperative store in that State in 
1911 because the grievance committee of the Minnesota Retail Im- 
plement Dealers' Association complained that such sales were ir- 
regular. 

The sale of goods to cooperative stores had already been discussed 
by the directors of the Western association at the convention in 
January, 1900, when* it was decided that the association could not 
then reach such cases, and the subject was dismissed. A year later 
the report of the secretary of the Westera association disclosed the 
reason for the opposition of dealers to such stores. In this report 
he said: 

As I understand it, the prices maintained are somewhat lower 
than the regular retail prices; then each purchaser who is a 
subscriber to the stock of the cooperative store receives a re- 
bate, and it has become the custom of these parties to purchase 
goods for their neighbors, securing the rebate for themselves 
and dividing it with the purchaser. It can readily be seen that 
this makes very hard competition for the other dealers in the 
same towns. 1 have had considerable correspondence with the 
dealers in that county and finally wrote them that if one of 
their members saw fit to be present at this meeting I knew that 
this board would accord them a respectful hearing. 
Activities of the Iowa Implement Dealers' Association in oppo- 
sition to the sale of farm machmery by farmers' cooperative stores 
in that State are referred to elsewhere. (See pp. 154^158.) 

In October, 1910, the secretary of the Federation, in a letter to the* 
president of the Cost Educational Association (who soon afterwards 
became secretary and general manager of the National Implement & 
Vehicle Association), characterized the cooperative movement among 
farmers as dangerous. The letter referred to read in part as fol- 
lows: 

A new danger threatens the dealers in Kansas and Oklahoma. 
I refer to the Farmers' Unions. These are causing trouble be- 
cause some manufacturers and jobbers contend that they must 
sell to them. It is going to cause trouble. I want to talk to you 
about this in St. Louis if I can have your attention a few mm- 
utes. It is a matter that we must handle quickly. It can not 
be given any publicity. Could not take it up m Chicago as 
there was too much else to talk about. 
It may also be noted that the Virginia & North Carolina Retail 
Implement, Machinery & Vehicle Dealers' Association, which was 
organized in February, 1909, and became affiliated with the Na- 
tional Federation in 1912, was engaged in opposing the sale of farm 
machinery to stores operated in connection with Farmers' Union 
cooperative stores at several points in North Carolina. Its sec- 
retary, in speaking of its work in 1912, stated that through its 



m 






EESTRICTION OF KETAIL TEADE TO EETAIL DEALEBS. 179 

efforts several large concerns had been induced to stop furnishing 
supplies to irregular dealers, mostly Farmers' Union cooperative 
concerns. He was strongly opposed to these enterprises, feeling that 
if they could get a supply of farm implements and machines they 
would eventually control that part of the retail business. Notwith- 
standing the fact that this association was composed of only about 
40 members in 1912, its protest to several manufacturers is said to 
have caused the latter to discontinue shipments to several farmers' 
cooperative stores in North Carolina. After its protest a wagon- 
manufacturing company refused to furnish a second consignment of 
goods to a farmers' cooperative supply company which planned to 
sell to members at cost after making allowance for an amount neces- 
sary to pay 6 per cent on stock after actual selling expenses were 
paid. A protest to a western plow manufacturer caused the latter 
to advise the farmers' cooperative store at another point that they 
could furnish no more goods until they had made an investigation, 
and also caused an eastern manufacturer of farm machinery to stop 

selling to this store. 

Similarly, protests from regular dealers resulted in cutting off 
most of the supplies of a farmers' exchange at a point in eastern 
Tennessee. 

The president of the Virginia and North Carolina implement deal- 
ers' association, in an address in the early part of 1913, is quoted as 
saying : 

The Farmers' Union, an organization established for the 
purpose of buying and selling direct, must claim a portion of 
our attention, for if this combine accomplishes its full purpose, 
the retail implement dealer is no longer of service to his coun- 
try except to carry repairs and furnish time trade to those 
who can not obtain membership in the union. We can not object 
to a manufacturer selling these unions provided he markets his 
entire output in this manner, but must assert ourselves against 
the practice of selling both the dealer and the consumer. 

In 1913 the Pennsylvania and New Jersey Retail Implement 
Dealers' Association became one of the constituent associations of 
the National Federation. This association had been formed a short 
time before, largely through the efforts of a trade paper which made 
an aggressive campaign against the sale of goods by manufacturers 
to a cooperative enterprise operated in Pennsylvania by the Lancaster 
County Farmers' Association. Almost as soon as the association of 
Pennsylvania and New Jersey dealers joined the Federation it filed 
protest with the secretary of the latter organization against the sale 
of goods to this concern in Lancaster County. 

The Federation secretary wrote the secretary and general man- 
ager of the National Implement & Vehicle Association, advising him 



r-/ 



180 FABM-MACmNEBY TBADE A8S0CUTI0N8. 

that the Pennsylvania and New Jersey dealers had a grievance in 
the matter of manufacturers seUing to cooperative stores, which they 
wanted to have considered at the next Federation meeting. He 
wrote that a great amount of pubUcity had been given this matter 
through certain trade papers, and he understood that a request had 
been made of the president of the National Implement & Vehicle 
Association to appoint a special committee to hear the grievance of 
the eastern dealers, and that a similar request had been made of the 
Federation. He stated in his letter that they had been advised that 
the Federation could not think of granting their requ^t for a special 
committee, but that a hearing would be granted. The matter, he 
thought, should come up before a meeting of the comniittee on dealers 
associations of the manufacturers' association and the official board 
of the Federation. Apparently, one of the reasons why the eastern 
dealers had requested that the matter be referred to a special com- 
mittee was the fact that the chairman of the manufacturers com- 
mittee on dealers' associations was one of the manufacturers com- 

^^The siretary of the National Implement & Vehicle Association 
in his reply to the secretary of the Federation stated that he had 
discussed the matter with the chairman of the executive committee 
of the manufacturers' association, and that in their opinion it was a 
matter that did not properly concern the joint conference until it 
had been reduced to a point where some principle of a general char- 
acter was involved. He advised that the Federation appoint a 
special committee to meet with the chairman of the committee on 
defers' associations of the manufacturers' association and other 
manufacturers concerned in the eastern trade to thi-esh the matter 
out and report. He went on to say: 

The conditions in the eastern territory, as you »"* P/obably 
well aware of, are quite different than m the West, and I do not 
Jwnk y^wiil fin3 it possible to apply literally the definition 
ofTretail dealer to that eastern country, but undoubtedly some- 
thing can te done to bring about a better understanding between 
both dealers and manufacturers. 
The Pennsylvania and New Jersey Retail Implement & V.*.cle 
Dealers' Association was represented at the convention of the Federa^ 
tion at its convention in October, 1913, but the published records of 
that meeting do not show that any action was taken on the complaint 
of the eastern dealers, nor do the resolutions adopted contam any 
reference expressing the condemnation of farmers' cooperative en- 
terprises except as may be contained in the following : 

OuesUonable selling «cAe»ne«.— Whereas, in the course of re- 
tail tradnertain conditions have developed in which corpora- 
tionsVtois or individuals have sold so-called membership cer- 



/" 



BESTRICTION OP RETAIL TRADE TO RETAIL* DEALERS. 181 

tificates, which entitle the holders to special prices more favor- 
able than those offered to nonholders of certificates, therefore, 

be it 

Resolved, That such fly-by-night schemes should not be prac- 
ticed; that concerns adopting this plan are not entitled to the 
benefits derived from membership in the retail associations, and 
that said concerns place themselves in a position to be looked 
upon unfavorably as customers for manufacturers and jobbers. 

The implement trade paper which aided in the formation of the 
Pennsylvania and New Jersey association (see p. 179) was also a 
factor in causing the association of Virginia-North Carolina dealers 
to be organized. This paper, which was adopted as the official organ 
of the latter association, in an editorial discussing the competition of 
the cooperative stores, said : 

It makes no difference at all if these farmer stores carry a 
stock, sell at retail prices and perform outwardly the function 
of a regular dealer, they are organized to break down the regu- 
lar merchant, and we are going to fight any house who will 
supply goods to them and attempt to supply goods at the same 
time to the regular merchant. 
In explaining the attitude of the organized dealers toward the 
sale of implements to cooperative stores to an agent of the Bureau 
of Corporations in 1912, the secretary of the Federation asserted 
that that organization had never considered the general topic of 
cooperative stores. He stated there is no reason why implements and 
vehicles should not be included in the stock of successful farmers' 
stores; that whether a manufacturer is justified in making a suc- 
cessful farmers' store his retail agent depends upon the selling policy 
of the company. He asserted that if the farmers' company sold at 
cost it would put all dealers out of business, and that if it expected to 
pay dividends to stockholders allowance must be made for expenses 
and profits. He stated that the fact that a farmers' cooperative asso- 
ciation holds stock in an established corporation doing a regular 
implement business would not necessarily make that corporation an 

irregular dealer. . 

During the summer of 1912 agents of the Bureau interviewed a 
number of managers of farmers' cooperative enterprises in several 
States. It was found that many of the so-callal cooperative stores 
were merely stock companies not really cooperative. It was found 
that cooperative stores were not numerous and that those handling 
implements were still fewer in number. Of over 800 farmers' elevator 
companies in the State of Iowa, probably less than 20 handled imple- 
ments. Several which had formerly handled implements had given 
up the attempt. One reason assigned for this chaiige was the difficulty 
of securing standard lines of goods due to the attitude of the Iowa 
Implement Dealers' Association. Another reason given was that the 



182 



FARM-MACHINERY TRADE ASSOCUTIONS. 



manufacturers took away the agency because the retail prices of the 
cooperative store were not high enough. A third reason assigned 
was lack of capital, which made it impracticable for the cooperative 
stores to sell implements on time. Nearly all the managers inter- 
viewed agreed that the profit in implements was less than in other 
lines handled, and they did not believe that it would pay to handle 
implements as a separate branch of their business, as the volume of 
their implement trade was small. 

Opinions of the trade as to protective activities of associa- 
tions. — In the course of the Bureau's investigations members of vari- 
ous associations, including the Western, Iowa, Illinois, North Dakota, 
Tri-State, and other associations, expressed the opinion that direct 
sales by manufacturers and jobbers had been curtailed through the 
efforts of the dealers' associations. 

In Minnesota one dealer belonging to the Minnesota Ketail Imple- 
ment Dealers' Association stated that the members of that association 
do all they can to secure a list of manufacturers who do direct selling 
and that " the boys " come away from the meetings in such a frame 
of mind that they will not patronize such wholesalers. Other mem- 
bers thought that the Minnesota association had benefited its members 
by breaking up direct selling. One stated that the association through 
its grievance committee would "boycott" a wholesaler for selling 
direct to farmers in a territory where the wholesaler had a dealer 
agent. Another member stated that if the wholesaler refused to stop 
direct selling the case was reported to the convention of dealers who 
were then expected to quit buying of him. Another member said 
that the association knows that it dare not distribute lists of direct 
sellers among its members, but these names can be well scattered 
among the dealers by means of the traveling salesmen of loyal houses. 

The representatives of several of the smaller wholesale houses at 
Minneapolis stated that the Minnesota association had been more 
aggressive prior to 1910 than subsequently. One had been threatened 
some time previously with a boycott which had not been carried 
out. Another had been told by the dealers that if he did not pay a 
commission requested they "would fix him." Another representa- 
tive of a wholesale house who had paid a commission on a direct sale 
at the request of the dealers' association, stated that he supposed 
he would have been blacklisted if he had not paid it, as he believed 
it to be the policy of the association to boycott wholesalers who sold 
directly. Another manufacturer stated that the Minnesota dealers' 
association was strong, but would not boycott anyone for that reason, 
and in this connection he cited an instance where he had made a 
direct sale which was reported to the association, but nothing was 




RESTRICTION OF RETAIL TRADE TO RETAIL DEALERS. 



183 



done. Furthermore, no evidence was found to indicate that any 
manufacturer or jobber had ever been actually put under the ban of 
this association. 

Protective activities not confined to implement trade. — ^The 
protective efforts of the implement dealers' associations have not been 
confined to the implement trade. In alluding to this matter in 
December, 1909, the secretary of the Western association in a letter 
to a Kansas dealer wrote, in part, as follows : 

You are mistaken when you say that the interest of our as- 
sociation is devoted only to the implement business. This is 
far from being the case. We feel that we have accomplished 
more real good with the hardware and supply houses than with 
any other branch. A few years ago nearly all of the hardware 
and supply houses were selling goods to mail order houses, but 
at present not one of them is doing it to my knowledge. We 
are taking up complaints on account of violation of trade rules 
by the hardware houses just the same as the implement houses. 
I am glad you have given me an opportimity of explaining this. 

Still later, in writing to another firm of dealers, in May, 1911, he 
said: 

I have a number of complaints on hand now where shipments 
have been made to parties who are not regular hardware dealers, 
and they are being pushed the same as though they were for 
implement dealers. 

The fact that you have not had any trouble in your vicinity 
is a matter for congratulation, and I hope that you will give 
the association's restraining influence credit. If you have 
any particular grievances, kindly notify me. 

In the latter part of 1912 it was asserted in the Bulletin that over 
80 per cent of the members of the Western association handled hard- 
ware and that a large percentage were exclusively hardware dealers.* 

In March, 1913, members of the Kansas City Retail Hardware 
Dealers' Club joined the Western association to secure its protective 
influence. This marked the consummation of negotions that had 
been pending for two years. 

Shortly after the Kansas City hardware dealers joined the West- 
ern association an item was published in the Implement Dealers' 
Bulletin stating that two instances had already taken place which 
showed that their confidence in thinking that they could get some 
relief from unfair conditions by joining the Western association had 
not been misplaced. Subsequently, the secretary of the Kansas City 
Eetail Hardware Dealers' Club wrote the secretary of the Westeru 



*In 1913 several local clubs of hardware dealers, previously organized by the Minnesota 
Retail Hardware Association, were combined with local clubs of Implement dealers organ- 
ized by the Minnesota Retail Implement Dealers* Association. Local clubs formed in that 
State during 1914 were composed of both hardware and implement dealers. 



184 



FABM-MACHINERY TRADE ASSOCIATIONS. 



association in regard to the assistance of the latter association, as 

follows : 

I was instructed at last night's meeting of our club to convey 
to you the thanks of this body for the help of the officers of your 
association in bringing about a very important change in condi- 
tions here but think all concerned will be benefited and we are 
pleased to think we joined the Western association and have the 
benefit of its protective influence. 

In connection with this matter the Bulletin for January, 1914, 
contained an article stating that one of the hardware companies at 
Kansas City had discontinued its retail department, a very lucrative 
branch of its business. This had been done, it was stated, in order 
to meet the wishes of the retail hardware dealers of Kansas City and 
of Independence, Mo. The article stated that the retail dealers " are 
much pleased with the new policy of this old and reliable concern, as 
the hardware dealers in the Kansas City territory will all be, and 
have pledged them a larger share of their business than they have 
heretofore given them." 

Furthermore, at the convention of the Western Retail Implement 
& Vehicle Dealers' Association in 1914, the name of that association 
was changed to the Western Retail Implement, Vehicle & Hardware 
Association in order to give recognition to members handling hard- 
ware exclusively. At this convention a number of automobile dealers 
were also admitted to membership. 

In the early part of 1913 the secretary of the Federation seems to 
have felt that the associations were in danger of losing sight of the 
fact that their primary object was the protection of the regular 
dealer. In this connection, he issued a general letter to the secretaries 
of the constituent associations in April, 1913, in which he said, in 
part: 

We are trying to raise the standard of the implement dealer 

and secure for him the protection to which he is entitled, but 

you know we can not do these things through our freight audit 

bureaus, etc. [See p. 73, note.] They are simply means to the 

desired end. 

A copy^of this letter was sent to the secretary and general manager 

of the National Implement & Vehicle Association with a letter which 

read, in part, as follows : 

I supposed that a copy of general letter No. 77 had been sent 
to you but I find it has not. I enclose one herewith. I simply 
send this to you to let you know what my fears are in regard to 
the work of some of our associations. They have been laying so 
much stress upon the insurance plans and the freight audit 
bureau that I feared they might neglect some other more im- 
portant work. I have received four replies and m all of these 



il 






BESTRICTION OF RETAIL TRADE TO RETAIL DEALERS. 



185 



% 



the secretaries express their thanks for the timely warning that 
I have given them. Three of them said they were going off on 
the very tangent I feared they would. If we are going to make 
a success of this association work we must not get very far away 
from the main principles for which we are organized. 

Section 4. Methods used with manufacturers nnwilling to settle com- 
plaints amicably. 

In the earlier years of association activity among the dealers, the 
members of various associations pledged themselves not to patronize 
any manafacturer or jobber who did not confine his trade to the 
^regular retailer. The establishment of harmonious relations with 
manufacturers' and jobbers' organizations provided a method by 
which most complaints by dealers against individual concerns could 
be amicably adjusted, but at times cases arose in which the manu- 
facturer or jobber complained of was not willing to conform to the 
requests of the dealers. From the standpoint of the dealers the most 
desirable way of treating such cases was for the names of such offend- 
ing manufacturers and jobbers to be furnished to the membership of 
the dealers' organizations. 

During the nineties the discussion of complaints at executive ses- 
sions of the members provided one way in which this information 
was disseminated, but as some uncertainty appears to have existed 
as to the legality of this practice, the secretary of the Western asso- 
ciation, in 1900, consulted the attorney of the Missouri & Kansas 
Lumbermen's Association as to the liability of the Western asso- 
ciation in reporting to m^bers the names of manufacturers and 
jobbers who had failed to afford what was considered proper protec- 
tion by the dealers. Arrangements were made whereby the attorney 
undertook to examine the laws of the States where the Western 
association was represented, and also to review the constitution 
and by-laws of the association and the resolutions adopted at conven- 
tions. The minutes of the association record that the attorney ap- 
peared in person before the board of directors of the Western asso- 
ciation at its convention in January, 1901, and advised as follows: 

To bring violations of trade rules to the attention of our 
members by simply stating in our Bulletin or by private cir- 
cular that " the following wholesalers sell at wholesale and re- 
tail " or " Mr. Blank says he would not buy from because 

they sell to the user or consumer." 

The minutes of this meeting, however, do not show that any action 
was taken on this advice. 

Information Bureau. — ^The matter of constituent associations fur.- 
nishing information to members was again taken up at the annual 
meeting of the Federation in October, 1903, and also in November, 



n 



186 



PAEM-MACHIKEBY TBADE ASSOCIATIONS. 



1904. At the latter meeting the secretary of the Federation reported 
as follows: 

There are, as you are aware, two classes of wholesalers; one 
class protects the dealer because they want to, and the other be- 
cause they feel compelled to, and there is a very evident feeling 
on the part of the latter that, owing to recent decisions of the 
courts, we are not in a position to report violations of well 
established trade ethics without laying ourselves liable under 
the anti-trust laws, and take the position that such action on 
our part would be construed as an act in restraint of trade. 
Developments during the year have demonstrated plainly the 
necessity of associations adopting such rules as will enable them 
to safely report to members the names of such wholesalers as 
do not show a willingness to protect the trade. 

The druggists' association is involved in litigation at the 
present time, and the lumbermen have had considerable trouble. 
The latter finally, upon advice of their attorneys, abrogated 
the old rules and formed a sort of information bureau. The 
members become subscribers for the information the same as 
a wholesaler does to a commercial agency when he subscribes 
for information concerning the standing of dealers. If the 
wholesaler shows a disposition to ignore the dealers' rights, the 
information can be given to members, and there being nothing 
in the rules which binds members to withhold trade from such 
concerns it can not be construed that the action is in restraint of 
trade, and the anti-trust laws will not apply. If at this meet- 
ing a set of rules can be outlined so that the coming conventions 
can ratify them it will be a very important work accomplished. 
The same by-laws might not be suitable for all constituent asso- 
ciations, as different situations may prevail in different localities. 
If we expect this Federation tq accomplish the greatest 
amount of good for the retail dealer we must organize upon a 
firm basis, not only that, but we must see to it that our con- 
stituent associations are thoroughly organized. There must be 
system about the work. This is one of the important matters to 
come before this meeting, and I trust that sufficient time will be 
devoted to it to complete the work. 
In connection with the secretary's declaration, shown above, to 
the effect that the associations should adopt rules to enable them 
safely to report to members the names of wholesalers who did not 
show a willingness to protect the trade, the preparation of a uniform 
constitution and by-laws for all of the constituent associations was 
made a special order of business at this convention. One of the dele- 
gates read the constitution and by-laws adopted a short time before 
by the Southwestern Lumbermen's Association, which, it was an- 
nounced, had been adopted by all of the lumbermen's associations 
in their Federation. After a thorough discussion, articles of associa- 
tion were adopted as a form to be recommended to the various associa- 
tions belonging to the National Federation of Impjiement & Vehicle 
Dealers' Associations. These articles stated the object of the asso- 






BESTRICTION OF RETAIL TRADE TO RETAIL DEALERS. 



187 






'. 






ciation was "to secure and disseminate to its members any and all 
legal and proper information which may be of interest or value to 
any member or members thereof in his or their business as retail 
implement, vehicle, or hardware dealers." (See Exhibit 24, p. 310.) 

The articles recommended provided that no rules, regulations, or 
by-laws should be adopted in any manner stifling competition, lim- 
iting production, restraining trade, regulating prices, or pooling 
profits ; that no coercive measures or discriminatory practices should 
be used toward any retailer to compel him to join the association or 
to refrain from buying from any particular manufacturer or job- 
ber; and that no promises or agreements of any kind should be 
.requisite to membership in the association, nor should any penal- 
ties be imposed upon members for any cause whatsoever. One of 
the articles provided, however, that any member, having a knowledge 
of a sale by a manufacturer or wholesale dealer to other than a regu- 
lar dealer, might notify the secretary of the association, giving full 
information, and that upon the receipt of this notice it should be 
immediately verified by the secretary. Each member was also ex- 
pected to furnish the secretary annually or oftener a list of the 
manufacturers and wholesalers from whom he bought. 

The resolutions committee of the Federation, in referring to the 
uniform articles of association, made the following report : 

As is well known to most of the official members of our con- 
stituent associations, their work, as well as that of the Federation 
board, is frequently hampered because of diversity and lack of 
' harmony in their different constitutions and by-laws. For this 
reason, and that the organization of our associations may be 
rendered more compact and their work more effective, we, your 
committee, earnestly recommend the articles of association for 
constituent associations, as approved at this meeting of the 
Federation; and urge the official boards of our several associa- 
tions and their delegates here present to endeavor by all honor- 
able means to secure the ratification and adoption of the same 
at their coming annual conventions. We would also recommend 
that a committee be appointed to revise our articles of federa- 
tion, in so far as may be necessary to conform to the new articles 
of association, thereby unifying, strengthening and safeguard- 
ing, legallj[ and otherwise, the entire plan of organization. 
Such committee to have the new plan passed upon by good legal 
talent and be prepared to report at next meetin^^ of the Federa- 
tion, or its board of directors, which your committee would sug- 
gest be held at Kansas City in January if enough members 
should be present to constitute a quorum. 

By August, 1905, the new constitution and by-laws had been 
adopted by practically all of the constituent associations. New 
articles of association for the Federation had been prepared, and it 
was announced that the Information Bureau, referred to in the re- 






^ 



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188 



FAKM-MACHINERY TRADE ASSOCIATIONS. 



port of the secretary of the Federation in November, 1904 (see p. 186) , 
had been incorporated under the laws of Illinois. It was stated that 
this bureau, made up of the official board of the Federation, would 
enable the executive committee at any time legally and safely to com- 
municate to the officers and members of the constituent associations 
all the facts pertaining to cases in which satisfactory adjustment 
could not be otherwise secured. In this connection, the following 
statement was made: 

Association members in good standing will be thereby fully 
informed as to who are " regular " and who are not and such a 
pressure must inevitably result as will carry any reasonable 
contention. While this proceeding is sometimes absolutely neces- 
sary in order to secure adequate protection for our members, it 
is at the same time an act of simple justice toward those jobbers 
and the manufacturers who are disposed to deal fairly with the 
trade. 

It was reported in January, 1906, that the organization of the In- 
formation Bureau had been completed, so that the Federation was 
properly fitted to afford the trade better protection than at any time 
theretofore by furnishing members with the names of manufacturers 
and jobbers making irregular sales. 

The secretary subsequently cautioned members not to do anything 
that could be construed in the light of restraining trade or prevent- 
ing parties who were engaged in business from buying goods. He 
reported that the attorney who had drawn up the articles for the 
Information Bureau- 
stated positively that we must not make any demands for commis- 
sions, as that might be construed as blackmail. Neither can we 
safely demand discontinuance of the shipments, as that would be 
construed as a direct violation of the antitrust laws. He stated 
that the proper course to pursue is to assume that the informa- 
tion you give is desired by the wholesalers, thev having declared 
that it is their policy to protect the dealer. Soon after this in- 
terview I wrote all secretaries of the constituent associations 
giving them the benefit of the attorney's service. 

In July, 1907, announcement w«s made that blanks had been sent 
to all members of the Western association which, when signed and 
returned to the secretary's office, would entitle the dealer to the in- 
formation which the Information Bureau had to give out from time 
to time. It was stated that no member would receive this informa- 
tion unless his request therefor was on file at the secretary's office. 

At the Federation meeting in October, 1907, the president ex- 
pressed the opinion that the new Information Bureau should be one 
of the inducements for adding membership to the associations and 
be a great factor in the adjustment of complaints. To secure the 
maximum benefit of the Information Bureau and the Federation, 



RESTRICTION OF RETAIL TRADE TO RETAIL DEALERS. 



189 



/" 



he urged dealers to favor their friends and not place their trade 
with concerns recognized to be in opposition to the rights of the 
retail dealers. He recommended that the subject of loyalty in all 
its phases be given special attention at the conventions of the con- 
stituent associations. At the convention of the Federation in Octo- 
ber, 1908, some doubts were expressed in regard to the legality of 
installing the Information Bureau, but a resolution was adopted com- 
mending its work. Officials of the Federation claim that this was 
done only for the moral effect it would have, and that the bureau 
was never put in operation. In October, 1909, it was announced that 
adverse decisions by the courts had made it inexpedient to put the 
bureau in operation. It should be noted that this action was taken 
immediately after the decision in the suit of the Farmers' Elevator 
Co., of Gowrie, against the Iowa Implement Dealers' Association. 
(See p. 157.) Although it is claimed that the Information Bureau 
has never been active, yet the charter was retained. 

Information supplied by association secretaries on request of 
INDIVIDUAL MEMBERS. — While the suits against the Iowa implement 
dealers and the Mississippi lumbermen were pending in the courts 
the dissemination of information regarding the trade policy of in- 
dividual manufacturers, at least so far as the Western association 
and the Federation were concerned, seems to have been confined 
largely to correspondence by the secretary with individual members 
who desired such information. Correspondence of this sort took 
place in June, 1909, between the secretary of the Western associa- 
tion and one of the members who had forwarded to the secretary 
correspondence with a manufacturer who had apparently refused 
to pay a commission on an irregular sale. The secretary in replying 
expressed his regret that he could not do anything in the case imless 
the member was handling the manufacturers' goods in the regular 
way, as the manufacturers took the position that they were privi- 
leged to sell to anybody, but insisted that commissions were paid 
upon direct sales wherever they had good dealers carrying their 
goods in stock. The secretary stated that notice had been given 
members at several conventions and through correspondence in re- 
gard to the policy of this company. In May, 1909, the secretary 
of the Federation wrote one of the members of the Western asso- 
ciation that the Michigan implement dealers' association had 
"taken the bull by the horns" and were sending out a report in 
regard to the trade policy of a specified buggy company. The sec- 
retary of the Federation expressed the opinion that the Michigan 
association had thereby laid themselves liable to prosecution, but 
he thought the probabilities were that they would not have any 
trouble because publicity would injure the buggy company. The 



\MKr^" 



iimi 



; 



100 



FABM-MAGHINEBY TRADE ASSOCIATIONS. 



secretary of the Federation was also secretary of the Western asso- 
ciation, and in this letter he went on to advise the member to whom 
he was writing that complaints had been filed against a concern 
whose cultivators the secretary thought the member was handling, 
and in this connection he asked for any information the member 
might have on this point. He concluded the letter as follows: 

I do not write this to discourage you from handling their 
goods, but simply as a matter of news. 

In April, 1910, the Bulletin called the attention of the organized 
dealers to the fact that in the office of the secretary of the National 
Federation there was on file a great amount of information con- 
cerning the policy of manufacturers and jobbers which it had taken 
years to collect. It was stated that this information was for the 
benefit of members of affiliated associations and that prompt atten- 
tion would be given to inquiries from members in regard to the 
manufacturers and jobbers from whom they were buying or from 
whom they contemplated buying. Another item, headed " Informa- 
tion," informed members of the implement and hardware associa- 
tions in the National Federation that, if they had any business with 
a specified manufacturing company, whose name was given, they 
could secure some valuable information regarding that company by 
writing to the secretary of their respective associations. 

Shortly after the decision in the Mississippi Lumbermen's case 
the secretary of the Western association advised members in a circu- 
lar letter that the antitrust laws prevented the publication, either 
by direct or implied statement, of the names of those manufacturers 
and jobbers who did not fully protect the dealer. He amplified 
this by stating that such a list of such names could not legally be 
furnished the members, nor published in the Bulletin, nor could 
reference be made to the fact that the methods of manufacturers or 
jobbers were inimical to the interests of the retail dealer. He 
stated that the instructions of the board of directors were being 
closely followed, and it was not proposed to take any steps in the 
association work that was not clearly within the pale of the law. 
He continued as follows: 

We are, however, clearly justified in furnishing you at your 
request with such information, as we may have at hand con- 
cerning specific cases. For instance, you are selling a certain 
scale, hay press, gasoline engine, line of plow goods, or vehicles, 
or are dealing with a certain hardware jobber or supply house 
or contemplate taking on certain new lines and want to be 
assured that the jobbers or manufacturers are loyal to dealers; 
you can make request for such information as the association 
nas been able to accumulate, and a copy of the records will be 
sent to you, and under our rules you are privileged to use your 
own discretion concerning your business relations with them. 



RESTKICTION OF RETAIL TRADE TO RETAIL DEALERS. 



191 



/^ 



The discretion which the members receiving this information were 
expected to exercise seems to have been indicated in an editorial pub- 
lished in the Implement Dealers' Bulletin in October, 1910. This 
editorial read as follows: 

Too many implements and vehicles are being sold by manu- 
facturers and jobbers at retail. To be sure, many claim to 
maintain a good retail price and are willing to pay the margin 
above wholesale price to some dealer who will take up their 
line, but if none such can be found they retain it and comfort 
themselves with the thought that they have done nothing wrong, 
as they charged the buyer a margin above wholesale price. 
They seem unwilling to stick to their own calling, the whole- 
sale business ; and the only way this practice can ever be stopped 
"*" is by dealers favoring with their patronage the wholesalers who 
will afford them full and complete protection. 

Organized dealers can get the information needed to enable 
them to do this by simply writing to their secretaries; if they 
have not the information at hand they can get it. 

Dealers themselves must take up this work; the officials can 
not do it all. What they need is stronger backing. The in- 
fluence of ten thousand dealers is greater than that of five 
thousand. 

Even before this time the secretary of the Western association had 
written a letter to one of the trade papers, from which it appears 
that although no formal pledge was exacted of members to discon- 
tinue purchases from direct-selling concerns, yet a certain pressure 
was brought to bear upon them by the association to induce them 
to do so. In this letter, written August 28, 1909, he mentioned the 
case of a plow company, many of whose dealer- agents belonging to 
the association had canceled their contracts with the company after 
the association had held its convention, the matter having been dis- 
cussed in board meetings at which these dealers were rather taken 
to task. 

Meantime an article was published in the Bulletin in August, 1910, 
explaining the manner in which the records of that office regarding 
the trade policy of wholesalers was kept, and urging members to 
make use of this information. This article read as follows : 

In order that our members may form some idea of the manner 
in which the records of this office so far as they pertain to policy 
of jobbers and manufacturers are kept, we give out a few quo- 
tations : 

" Establish a few agencies with dealers, but sell most of their 
goods direct, with good differential between wholesale and retail 
price." 

"Sell to jobbers, dealers and users, but claim to maintain 
sufficient differential to protect each branch of the trade." 

" Sell direct to users exclusively. Formerly sold to dealers, 
but changed policy." 



mmmi 



\ 



192 FARM-MACHINEBY TRADE ASSOCUHONS. 

"Affords the regular dealers the full measure of protection. 
Eefuses under all conditions to sell any goods at retail." 

" Sells direct where it has no agents carrying its goods in 
stock, but protects agents where it can get them." 

"Sells output to dealers, but at same time caters to the 
trade of liverymen, and on such sales declines to pay dealers 

commissions." « - i j 

These records are kept for the benefit of members, and any 
time a member is in doubt about the policy of a house with whom 
he is doing business or contemplates buying from, he can get 
such information as we have at hand by simply asking for it. 

For instance, you may be buying tanks from a manufacturer 
who professes to be protecting the dealer, but who in reality 
is taMng any business which comes his way, or vou may receive 
a letter from some scale company stating that they have a scale 
at the railroad depot in a neighboring town which was refused 
and as an inducement for you to take it off of their hands they 
will make special price, and if vou will take the trouble to make 
inquiry, you can in most cases learn the facts. 

This information is for the members, and to make the work 
of the association most effective they should make use of it. The 
records are made up from reliable information, the result of the 
most careful investigation. 
Present methods of disseminating information among dealers. — 
A principal aim of the implement dealers' associations at present 
is to find some means by which the names of manufacturers and 
wholesalers who are unwilling to confine their trade to regular 
dealers may be reported to members without incurring legal liability. 
As shown elsewhere (see pp. 200, 202) the National Federation 
of Implement & Vehicle Dealers' Associations is affiliated with 
organizations of retailers in other branches of trade in a federation 
known as the National Federation of Retail Merchants, which is seek- 
ing an amendment to the antitrust laws to make it lawful for the 
officials of retail trade associations to disseminate information of this 
character. The amendment desired by the associations would permit 
them to advise their members freely regarding so-called violations 
by wholesalers of rules established by the dealers. If this effort is 
successful, manufacturers and wholesalers whose names are listed 
will find it difficult or impossible to secure business from dealers 
loyal to the fundamental principle of the retail associations, namely, 
" to the retail dealer belongs the retail trade." 

Moreover, even now the dealers are not without means of inform- 
ing themselves of the trade policy of manufacturers and wholesalers 
wyii whom they trade. As already explained (see p. 190), any 
member of any constituent association of the National Federation, 
upon request to the secretary of the association to which he belongs, 
can be furnished with information regarding the trade policy of any 
particular manufacturer or wholesaler. At the annual meeting of 
the Federation in 1913, an organization of the secretaries of the 



EESTBICTION OF RETAIL TRADE TO RETAIL DEALERS. 



193 



4 



various constituent associations was formed to secure greater uni- 
formity in the activities of the several organizations, but it is 
claimed that this new association has nothing to do with the exchange 
of information regarding the trade policy of individual manufac- 
turers and wholesalers, although it is conceivable that such an or- 
ganization might furnish a convenient means of so doing. Informa- 
tion so exchanged among the secretaries would be available to any 
dealer of any of the federated associations, so far as the secretaries 
of these associations attempt to furnish such information at the 
request of a member. Furthermore, the secretary of each association 
has been instructed to place upon his mailing list the names of the 
secretaries of all the other associations to receive copies of circulars 
and documents sent out. 

Traveling salesmen of various manufacturers and wholesalers 
afford a possible means of disseminating information regarding the 
trade policy of competitors, but this method does not seem to bear 
any necessary relation to the activity of the dealers' association. 

Another source from which dealers might obtain information of 
this character has been the columns of The Commercial News, a trade 
journal published at Sioux Falls, S. Dak. This journal, which 
appears to have some circulation among implement, vehicle, and 
hardware dealers, has maintained a printed list of manufacturers and 
jobbers alleged to be unfair to dealers, and also a list of those sup- 
posed to be loyal. 

In 1911 the Eastern Dealer, an implement trade paper published 
at Philadelphia, which was engaged in aggressive opposition to 
sales by manufacturers to farmers' cooperative stores, printed a list 
of manufacturers who were alleged to be selling to a cooperative 
store in Lancaster County, Pa., and quoted two of these manufac- 
turers as declaring that they would continue to do so. According 
to the paper, the other concerns listed had promised to investigate 
the situation. It was stated that their names would be retained on 
the list or removed according to their decision. The paper requested 
dealers who knew of other lines so sold to send the facts to the paper 
for publication. 

Section 5. Opposition to mail-order or catalogue houses. 

Sales ix) mail-order houses by manufacturers. — A determined 
fight has been made by the organized dealers against mail-order or 
catalogue houses. In January, 1896, the members of the Western 
association pledged themselves as an association and as individuals 
not to patronize or have any dealings with any manufacturer or 
jobber who sold goods to catalogue houses, and it was decided that 
every such manufacturer should be reported at least quarterly to 

68248°— 15 Vt 



'A 



194 



VABM-MACHINEBY TBADE ASSOCIATIONS. 



RESTRICTION OP RETAIL TRADE TO RETAIL DEALERS. 



195 



each member by the secretary. The secretary took this matter up 
by correspondeiice with various manufacturers, all of whom were 
reported to have promised cooperation in keeping their goods out 
of the hands of catalogue houses. It was announced that several 
concerns had notified their jobbers not to sell any goods to such 
houses. In April, 1898, a list of manufacturers who had made 
affidavits that they did not sell to catalogue houses was published 
in the Implement Dealers' Bulletin, the official paper of the Western 
association, and in January, 1899, that association authorized the 
payment of $10 for the presentation of satisfactory evidence of the 
sale of goods, directly or indirectly, to any catalogue house by any 
manufacturer or jobber who sold or sought to sell any part of his 
goods to regular dealers anywhere. In January, 1900, representa- 
tives of the National Association of Agricultural Implement & 
Vehicle Manufacturers, the Carriage Builders National Association, 
the Kansas City Implement, Vehicle & Hardware Club, and the 
Western association held a conference and recommended that manu- 
facturers abstain from selling goods to catalogue houses (see p. 134). 
Shortly afterwards this resolution was indorsed by the National 
Association of Agricultural Implement & Vehicle Manufacturers. 
One of the leading trade papers urged dealers to refuse, unitedly 
and peremptorily, to handle the goods of manufacturers who sold 
to catalogue houses. It recommended the formation of a general 
catalogue house committee to discover such manufacturers and 
furnish their names to dealers in order that the latter might avoid 
buying from them. It also advised the dealers to obtain the cata- 
logues of the mail-order houses for the purpose of establishing facts 
in regard to sales to such houses by different manufacturers and to 
cooperate with other associations for the suppression of such trade. 

The members of other implement dealers' associations besides the 
Western pledge themselves not to buy from manufacturers or jobbers 
who supplied goods to catalogue houses. In 1902 action of this kind 
was taken by the Illinois Implement Dealers' Association, whose 
members were reported to have also agreed not to buy from wholesale 
dealers who handled goods made by manufacturers who supplied 
catalogue houses. One of the objects in forming the National Fed- 
eration was to bring the influence of all the associations to bear to 
keep manufacturers from selling to catalogue houses. 

In 1904 and 1905 the Implement Dealers' Bulletin reported that 
several large jobbing houses at Kansas City had announced that they 
would not sell to catalogue houses. 

In the early part of 1907, Judge Carland, of the United States 
Circuit Court, District of South Dakota, rendered a decision holding 
that retail dealers had a lawful right to agree among themselves not 



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m 



# 



w 



to purchase merchandise from wholesalers and jobbers who sold to 
catalogue houses, and to inform each other as to what wholesalers 
and jobbers sold to such houses. The court also held that letters sent 
out by the secretary of the defendant association, under instructions 
of the board of directors, requesting the cooperation of various whole- 
salers and jobbers, urging them to refuse to sell to mail-order houses 
and confine their trade to the " legitimate " retail dealer, did not in- 
volve undue restriction on the right of the catalogue house to carry 
on its business free from intimidation or coercion, because " it is not 
unfair competition, intimidation, or coercion for a combination to 
interfere with this right by persuasion or any peaceable means." 
(Montgomery Ward & Co. v. South Dakota Retail Merchants' and 
Hardware Dealers' Association and others, 150 Fed. Rep., 413.) 

This decision apparently led the directors of the Western association 
to undertake arrangements for the appointment of a joint committee 
of dealers and wholesalers to cooperate in plans to meet catalogue- 
house competition. Furthermore, to ascertain the identity of fac- 
tories which were supplying catalogue houses as well as selling to 
dealers, the secretary of the Federation undertook the compilation 
of a list of all catalogue houses that sold any class of goods likely 
to be handled by members of the constituent associations of the 
Federation. The secretaries of the latter organizations were ap- 
pealed to for assistance as well as the members of the National Asso- 
ciation of Agricultural Implement & Vehicle Manufacturers. 

In October, 1908, the dealers belonging to the Federation re- 
quested the National Association of Agricultural Implement & 
Vehicle Manufacturers to request its members to absolutely discon- 
tinue the sale of goods to catalogue houses, and it was suggested 
that such sales should disqualify any manufacturer for membership 
in tho association. Moreover, an editorial in the Implement Dealers' 
Bulletin shortly afterwards pointed out that dealers ought to bestow 
their patronage where the dealer was recognized as a necessary link 
in the chain of distribution. 

The policy of the National Federation at that time was stated to 
be one of persuasion. It was asserted that the dealers wanted the 
National Association of Agricultural Implement & Vehicle Manu- 
facturers, most of whose members confined their sales to dealers, to 
show the minority the injustice of selling to catalogue houses while 
selling to dealers. While no systematic campaign appears to have 
been undertaken by any of the manufacturers' associations at this 
time, it seems to have become an unwritten qualification for member- 
ship that the members should confine their sales to retailers. 

Until 1908 the active opposition of the dealers' associations toward 
mail-order houses was largely confined to efforts to prevent the en- 
actment of parcel-post legislation and to shut off the sources from 



196 



FARM-MACHINERY TRADE ASSOCIATIONS. 



which the latter concerns were supplied with goods. As a part of 
the earlier plans to induce manufacturers not to sell to mail-order 
houses by the withdrawal of the dealers' patronage, it was neces- 
sary to advise the members of the dealers' association as to the 
names of such manufacturers, and in this connection the same dif- 
ficulty presented itself as to the use of methods that were safely 
within the law as in reporting the names of manufacturers selling 
directly or to irregular dealers. (See p. 185.) I^ess hesitation was 
felt in regard to the circulation of the names of those concerns whose 
avowed policy was to sell directly. After it became evident that the 
Information Bureau of the National Federation could not safely 
disseminate among the dealers generally the names of manufacturers 
who persisted in selling a part or the whole of their product to cata- 
logue houses, efforts were made to devise some means by which the 
dealers could be advised more directly and definitely of the names of 
these manufacturers and wholesalers. In a general letter to members 
in June, 1910, the secretary of the Western association called atten- 
tion to the fact that the names of such jobbers and manufacturers 
could not be listed or published, but that members could obtain infor- 
mation by asking the secretary for it. Most manufacturers seem to 
have been in sympathy with the efforts of the dealers to curtail the 
sales of the mail-order houses, but some manufacturers furnished 
them with goods. 

In January, 1910, the manufacturers' and dealers' associations 
became alarmed over the announcement that one of the large 
Chicago mail-order houses had purchased a well-known, established 
factory making plows and other farm implements, and unsuccessful 
protests were made to prevent the exhibit of its products at the 
Illinois State Fair, but it is claimed that greater success attended 
similar efforts to prevent the exhibition of its products at fairs m 

Iowa and Minnesota. 

At the conventions of the various associations of implement deal- 
ers during the season of 1912-13 indorsement was given to a bill 
introduced in Congress making it compulsory for manufactured 
articles to be branded with the name of the maker. At these con- 
tentions special reference was made to the protection which the bill 
was calculated to afford retail dealers against the competition of 
mail-order houses by revealing the name of manufacturers who sold 
goods to mail-order houses. In its original form the bill did not 
meet with the approval of the manufacturers, largely because it 
allowed no exception to be made of parts sold by one manufacturer 
to another for assembling to make a complete machine. 

During the last two or three years it has been customary for the 
various State and interstate associations of implement dealers to con- 



41 > 
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RESTRICTION OP RETAIL TRADE TO RETAIL DEALERS. 197 

duct a " question box " at their annual conventions. Questions sub- 
mitted by individual members are read from the platform by one of 
the members selected to conduct the discussion which ensues. One of 
the questions presented for consideration of the Wisconsin Retail 
Implement & Vehicle Dealers' Association, at its annual convention 
held at Milwaukee, December 15-17, 1914, was : 

What attitude has the Wisconsin dealer taken towards a manu- 
facturer who sells mail order houses and the dealers ? We refer 
to the Hercules Engine Co. of Evansville, Ind., an exhibitor. 

It was understood by the dealers present that the Hercules com- 
pany was selling gasoline engines to one of the large mail-order 
houses. It had arranged to make an exhibit of its products at the 
dealers' convention, notwithstanding the fact that the dealers ex- 
pected all exhibitors to display a sign provided by the association to 
the effect that they did not sell to catalogue houses nor direct to the 

consumer. 

A representative of the Hercules company was invited to appear 
before the dealers to explain the policy of his company. He stated 
that the company was making gasoline engines fcr one of the largest 
mail-order houses in the United States, but that this engine was given 
a different name and was built along different lines from that sold to 
dealers, although both engines were of the same quality. He pointed 
out the advantage to the company in selling a large number of en- 
gines for cash to the mail-order house. He declared that he had 
instructed the company's traveling men to explain to every dealer 
that the company was engaged in selling to the mail-order house. 

Following this explanation he answered the dealers' questions 
about his company and its trade. After his withdrawal his state- 
ment was discussed, and the secretary spoke as follows: 

♦ ♦ * I have never bought a dollar's worth of goods from 
any manufacturer that I knew was selling either direct to the 
trade or to a catalogue house, and I never will. We have a great 
deal of difficulty in finding out who these people are, and you all 
have that trouble. They all like to misrepresent one another at 
times, and the only fair and right and honest way to find out is 
to bring the gentlemen before such an intelligent body of men, 
and when he tells you right out and out that they manufacture 
and sell to the catalogue house, not to buy a dollar's worth of 
goods from the Hercules Buggy Co. and the Hercules Engine 
Co and I would go farther than that as an individual, 1 would 
try to keep anyone else from buying from the manufacturer that 
sells to the mail order people, because we have nothing in com- 
mon with them. They advertise in their catalogue that the 
dealer is robbing the consumer, and they tell it m so many plain 
words in their catalogue, and they never lose an opportunity to 
get a swipe at a dealer because they say that our price is so much 
and the dealer's price is so much and he is robbing you all. I hey 



198 



FARM-MACHINEBY TBADE ASSOCIATIONS. 



will print an article of that kind to deceive the consumer. It is 
my duty as an honest implement dealer to do all I can to prevent 
my brother dealer from buying from them. 

Later, he again addressed the dealers as follows : 

Your secretary is going to have this published in the trade 
papers verbatim. We want every dealer in the United States 
to Know the truth, what is the reputation and the business prac- 
tice of this company and just exactly what they are doing, then 
it is up to the individual to decide whether he will protect a loy:il 
retail trade. 

I would move you that the matter be lef erred to the resolutions 
committee, with instructions to bring in a resolution stating 
plainly what the attitude of the organized dealer should be in 
regard to the sale of goods manufactured by the Hercules Gas 
Engine Co. 
In connection with this matter the association adopted the follow- 
ing resolution: 

The practice of certain manufacturers who sell their product 
to catalogue and mail order houses and at the same time solicit 
the trade of the regular retail dealer, cannot be too strongly con- 
demned. Even if they do make a cheaper and inferior article 
for the catalogue house trade and brand it under a different 
name, we deem it a bad business policy for the regular dealer to 
patronize such a manufacturer, and the dealer who desires to 
protect his customers as well as himself should handle only first- 
class goods manufactured by those who are loyal to the retail 
trade. The catalogue and mail order houses contribute nothing 
toward the advancement and development of the rural communi- 
ties. They pay no taxes, render no service, nor do they help to 
carry the burdens usually borne by the dealers and consumers in 
tiio small towns and agricultural sections of our state. And if 
we would maintain our schools, churches and public institutions 
of all kinds, and develop and expand the resources of our several 
localities, we must see to it that we protect not only our own 
interests, but those of our customers, by offering to our trade 
articles of real worth and merit, and at a price consistent with 
fair and reasonable profits, and manufactured by those whom we 
know to be fair and honest in their dealings with the regular 
trade. 
Parcel-post legislation.— The establishment of a parcel-post sys- 
tem was opposed on the ground that it would aid the catalogue houses 
and be of little benefit to anyone else. The various dealei-s' associa- 
tions inaugurated a vigorous campaign of opposition to the enact- 
ment of such legislation, and petitions of protest were circulated. 
It was claimed that the efforts of the dealers led to a change in the 
attitude of many manufacturers. In 1903 it was reported that offi- 
cers of the various constituent associations of the Federation had 
addressed letters to Senators and Representatives in Congress from 
their respective States, protesting against the adoption of a proposed 



/ 



EESTRICTION OP RETAIL TRADE TO RETAIL DEALERS. 



199 



amendment to the post-office appropriation bill to provide for an ex- 
perimental parcel post and calling attention to petitions that had 
previously been forwarded to them. Manufacturers and jobbers 
were urged to aid the dealers. A little later the secretary of the Fed- 
eration, in a general letter to secretaries of the various constituent 
associations, claimed that some time previously, through the efforts 
of the dealers' Federation, the manufacturers belonging to the Na- 
tional Association of Agricultural Implement & Vehicle Manufac- 
turers had adopted a resolution instructing the legislative committee 
of that association to do everything they could in opposition to a 
parcel-post bill, although a resolution indorsing the bill had previ- 
ously been prepared for adoption. Members of the constituent 
associations of the Federation were urged to renewed efforts to 
defeat the bill by personal interviews or correspondence with their 
Members of Congress, and it was reported that the manufacturers 
belonging to the National Association of Agricultural Implement & 
Vehicle Manufacturers had adopted a similar plan. 

During this period the implement dealers' association kept up a 
constant agitation against parcel-post legislation, and it was re- 
ported that the officials of the implement dealers' Federation were 
working in harmony with the National Hardware Dealers' Associa- 
tion and other dealers' organizations in outlining plans for placing 
the dealers' side of the case before Congress. 

A new line of attack on parcel-post legislation was proposed in 
the early part of 1908, namely, an attempt to cultivate a sentiment 
among the farmers opposing such legislation. A plan of this sort 
had been suggested ten years before by members of the Nebraska 
& Western Iowa Implement Dealers' Association, who proposed 
arrangements for meetings of the farmers to explain the damage 
done to local communities by trading with catalogue houses. Little 
progress, however, seems to have been made along this line. 

In February, 1909, the secretary of the Federation wrote the sec- 
retaries of the various constituent associations that the outlook in 
regard to parcel-post matters was not favorable, and he admonished 
the secretaries to see that their Senators were "bombarded" with 
protests at once. He also requested the assistance of the Kansas City 
implement jobbers' club, asking that its members telegraph their 
Senators protesting the enactment of a resolution for an experi- 
mental parcel post in four counties. 

Early in 1910 a committee representing various trade organiza- 
tions, including those of the retail implement and vehicle dealers, 
appeared before a subcommittee of the Committee on Post Office 
and Post Roads of the United States House of Representatives to 
oppose the various parcel-post bills that had been referred to that 



200 



FABM-MACHINERY TBADE ASSOCIATIONS. 



committee. This committee did not confine its efforts to the mem- 
bers of the Postal Committee, but lost no opportunity to explain the 
dealers' position to other Congressmen. It was thought that, even 
if the Postal Committee should make a favorable report, enough 
uncertainty existed in the minds of Congressmen regarding the 
advisability of enacting such legislation to prevent any action at 
that session of Congress. In October, 1910, the Federation gave 
instructions that whenever it became necessary a representative 
should be sent to Washington to look after the interests of the 
implement dealers. 

Early in 1911 it was announced that an organization, known as 
the American league of Associations, had been formed to guide the 
organizations of manufacturers, jobbers, and dealers in various 
lines and direct the campaign against parcel-post legislation. In 
February, 1911, the secretary of the Federation of implement deal- 
ers' associations in a general letter to the secretary of each of the 
constituent associations stated that the league had prepared a peti- 
tion protesting against parcel-post legislation, that should be signed 
by every merchant and professional man in the United States. He 
insisted that the implement dealers' Federation must do its part in 
the distribution of this petition. 

In the latter part of 1911 a general federation of national organ- 
izations of retailers in various lines was organized at Chicago for 
the purpose of stopping legislation inimical to retail merchants and 
to promote legislation for their advancement. The project for this 
association appears to have originated with the secretary of the 
Michigan Retail Lumber Dealers' Association, who was subse- 
quently selected by a committee of the Lumber Secretaiies' Bureau 
to develop the idea by correspondence with different interests in 
the United States. Some correspondence passed with the secre- 
tary of the implement dealers' National Federation, and the latter 
also discussed the project yvith the secretary of the Southwestern 
Lumber Dealers' Association. It was pointed out that if such a 
federation became powerful enough it could, among other things, 
prevent the enactment of a parcel-post bill. It could also work for 
a modification of the Sherman Antitrust Law to allow the retail 
merchants to maintain their organizations in order to exchange 
information regarding the source of catalogue-house competition. 
The meeting at which this new federation, known as the National 
Federation of Retail Merchants, was formed, was attended by rep- 
resentatives of the implement dealers' National Federation. The 
executive committee of the latter Federation was authorized to take 
such action as it deemed best in reference to becoming affiliated with 
the new federation, of which the secretary of the implement dealers' 
Federation was elected a director. 



i^^\ 



EESTRICTION OF RETAIL TBADE TO RETAIL DEALERS. 201 

During 1911 and 1912 the secretary of the implement dealers' 
Federation issued several letters to the secretaries of the constituent 
associations relative to the matter of parcel-post legislation. A rep- 
resentative of the Federation also appeared before the Senate Com- 
mittee on Post Offices and Post Roads to oppose such legislation, 
and it was announced that the secretary of the American League of 
Associations had established headquarters in Washington, where he 
was working early and late in daily communication with all tha 
associations of dealers that were sending him any assistance. 

In March, 1912, the prospect for the enactment of parcel-post 
legislation apparently became so certain that the secretary of the 
implement dealers' Federation, and also the secretary of the Na- 
tional Federation of Retail Merchants, sent out an appeal to those 
opposed to such legislation to urge their representatives at Wash- 
ington to do everything in their power to secure the appointment of 
a commission to make a thorough investigation of the subject before 
any legislation was enacted. 

Members of the constituent associations of the implement dealers' 
Federation were urged to arrange at once with their local newspa- 
pers to print articles that had been furnished them for the purpose of 
building up a sentiment among the readers of country newspapers 
against the parcel post. It was pointed out to the dealers that the 
local newspaper editor would be glad to publish one of these articles 
each week at the dealers' request, especially if the latter were adver- 
tising in the paper. Members of the implement dealers' Federation 
and of the National Implement & Vehicle Associi«tion were urged to 
write their Congressmen to indorse the commission plan. 

The efforts of the dealers to prevent the enactment of parcel-post 
legislation proved futile, but the Implement Dealers' Bulletin, in re- 
ferring to the law establishing a zone system, stated that it was the 
least injurious to the retail merchants of any that had been proposed. 
Dealers were admonished, however, to keep up their organizations 
to try to prevent any changes that would be still more injurious. 
Subsequently the National Federation of Retail Merchants adopted 
a resolution favoring a revision of the postal laws so that the carry- 
ing charge for the different classes of mail should be sufficient to 
maintain each department without financial assistance from any 
other source. This movement had already been indorsed at a meet- 
ing of the implement dealers' National Federation in connection with 
a recommendation to the secretary of the Federation to use every 
effort, both directly and through other organizations, to secure the 
enactment of a 1-cent letter postage law. Arrangements were also 
made for each member of the various implement associations to re- 
ceive literature on the subject direct from the National One Cent 



i 



%m 



FABM-MAOHINEBY TBABE ASSOCIATIONS. 



Letter Postage Association. This cunpaign was intended to bring 
about increased charges on parcel-post matter. 

In the meantime the National Federation of Retail Merchants had 
held a meeting at St. Louis in November, 1912, at which resolutions 
were adopted, demanding legislation by Congress to permit coopera- 
tion among retailers to protect against outside competition, and 
pledging the support of the Federation to all efforts in this direction. 
Another meeting was held in December, 1913, and shortly afterwards 
i«presentatiyes of the National Federation of Retail Merchants vis- 
ited Washington to present arguments in favor of legislation allow- 
ing retailers to join forces for the purpose of obtaining and furnish- 
ing each other with information regarding the acts and selling poli- 
cies of wholesalers. A representative of this organization is reported 
to have disclaimed any intention on the part of the dealers to use this 
information to institute boycotts. 

Legislation against misrepresentation in advertising. — ^It is 
claimed by dealers, trade papers, and manufacturers who sell 
through dealers that advertising matter of mail-order houses is fre- 
quently misleading in representations as to the character and quality 
of goods. In October, 1911, the secretary of the implement dealers' 
Federation called attention to an agitation that had been begun 
to secure the enactment of laws prohibiting misrepresentation in 
advertisements, and in this connection he pointed out that, as such a 
law would benefit retailers in all lines in their struggle with mail- 
order houses, it seemed an opportune time for the Federation to take 
steps to give an impetus to the movement. At this meeting of the 
delegates of the various implement dealers' associations the secretary 
of the American League of Associations explained a bill that had 
been introduced in Congress at the request of a retail merchants' 
association in Iowa. The delegates indorsed the movemejit and urged 
action at the coming conventions of the constituent associations. 

The possibilities of legislation to aid dealers in competition with 
mail-order houses had been called to the attention of the secretary 
of the implement dealers' National Federation by the secretary of the 
Southwestern Lumber Dealers' Association in outlining the field for 
the proposed general federation of retailers. At the meeting at 
which this general federation was organized the movement for a pure- 
advertising law aroused considerable interest, and it was reported that 
the opinion was expressed that the passage of such a law would de- 
prive the mail-order interests of ''one of their strongest trade 

pullers.'' 

The movement was indorsed at the conventions of the various im- 
plement dealers' associations, and also aroused the interest of the 
secretary of the National Implement & Vehicle Association, who 
issued a bulletin to ascertain the opinion of the members as to whether 



RESTRICTION OF RETAIL TRADE TO RETAIL DEALERS. 203 

the association as an organization should lend its support to the 
passage of such a law in the several States or as a National measure. 
In April, 1912, it was reported that, in compliance with the request 
of the implement dealers' National Federation, the National Imple- 
ment & Vehicle Association was using its best efforts to build up sen- 
timent in favor of such a law. The matter was discussed at the 
conference between representatives of the manufacturers and the deal- 
ers at Kansas City in January, 1912, and also in October, 1912, by 
ihe delegates to the annual meeting of the implement dealers' Na- 
tional Federation. At the latter meeting resolutions were again 
adopted favoring such legislation, urging prompt action at the com- 
ing conventions of the constituent associations and other active meas- 
ures to secure the enactment of this law and others, including that 
relating to the branding of goods with the maker's name, and also 
to a peddler's license law. Furthermore, the National Federation of 
Retail Merchants shortly afterwards adopted a resolution urging the 
officers and directors of all retail associations to tajje immediate steps 
to secure the passage of an honest-advertising law in the several 
States to pave the way for similar legislation by Congress. 

Farm-paper advertising. — Another method proposed by the imple- 
ment dealers' associations to curtail the advertising facilities of mail- 
ofder houses has been to persuade publishers of various papers to 
exclude the advertisements of catalogue houses from their colunms. 
In 1899 an article published in the Implement Dealers' Bulletin 
advised the dealers to see if they could not make their local news- 
paper men see the effect of mail-order trading upon local merchants 
in the same light in which it was viewed by the latter, and in this 
way it was thought that the effort to exclude such advertising would 
be successful. Subsequently several of the implement trade papers 
announced the adoption of a policy of refusing advertisements from 
manufacturers who were supplying goods to catalogue houses, and 
the secretary of the Federation in writing to the editor of one of 
these papers stated that he had had considerable correspondence in 
regard to this particular matter and hoped that it would result in 
the exclusion of this kind of advertising. Furthermore, in October, 
1909, the delegates to the implement dealers' National Federation 
held a conference with representatives of the trade press to devise 
plans to furnish the papers pledged to protect the dealers with in- 
formation in regard to concerns who sold directly to users and to 
catalogue houses, while at the same time soliciting the trade of 
dealers. While the representatives of the papers expressed sym- 
pathy with the objects sought, no formal action appears to have been 

taken. 

An interesting phase of the situation has developed from an effort 
by the dealers to persuade manufacturers selling through the dealer 



204 



FABM-MACHINEBY TKADE ASSOCIATIONS. 



to refrain from advertising in farm papers that also publish adver- 
tisements of catalogue houses. Early in 1910 the secretary of the 
Federation in writing to the various other secretaries stated that 
information had been received that a certain farm paper, the name of 
which was given, was writing to some of the officers of the dealers' 
associations, asking if the dealers would not encourage manufacturers 
to advertise more liberally in farm papers. In this connection, the 
secretary of the Federation advised each secretary that if the latter 
should receive one of these letters he should in his reply state that, 
since, as a rule, the patronage of farm papers seemed to be princi- 
pally that of mail-order houses, the manufacturers felt that they 
owed it to the regular dealer to refrain from advertising in such a 

medium. 

The matter was brought up in January, 1911, at a conference be- 
tween representatives of the dealers' associations and National Im- 
plement & Vehicle Association. The manufacturers were asked if 
something could not be done to obviate the practice by which deal- 
ers, and manufacturers marketing their product through dealers, 
advertised in papers that carried advertising for catalogue houses 
and direct-selling concerns— advertising that worked against the 
interest of the local merchant. There ^as some discussion of the 
subject, but no formal action was taken. A few weeks later the 
executive committee of the National Implement & Vehicle Associa- 
tion decided to ascertain from the members as to articles or edi- 
torials appearing in farm papers detrimental to the interest of the 
members of the association and then to take the matter up further 
with members advertising in such papers. In the discussion by 
members of the committee it was brought out that some of the edi- 
torials in a number of the farm papers amounted to a strong recom- 
mendation to their readers to patronize the catalogue houses and 
direct-selling manufacturers. Any desire to dictate or suggest the 
policy of such papers in receiving advertising was disclaimed, but 
it was thought that the implement and vehicle manufacturers whose 
advertising was alleged to furnish the farm papers with one of 
their largest sources of revenue were entitled to greater considera- 
tion at the hands of the papers. It was stated that the puipose of 
canvassing the manufacturers on this subject was not to protest as 
an association, but to gather and compile data for the use of mem- 
bers as purchasers of advertising space. The various dealers' asso- 
ciations devoted considerable attention to the matter during the 
convention season of 1911-12, and the difficulty of determining 
what papers should be used as advertising mediums was discussed 
at conferences between the manufacturers and dealers. The sec- 
retary of the National Implement & Vehicle Association requested 
that "he be furnished with the names of papers containing edi- 



RESTRICTION OF RETAIL TRADE TO RETAIL DEALERS. 206 

torials objectionable from this standpoint. In M?rch, 1912, the 
secretary of the Federation advised the secretaries of the several 
constituent associations that the Federation's agitation was bearing 
fruit, and he asked for suggestions as to how to secure the informa- 
tion to make the work effective. Writing the secretary of the Na- 
tional Implement & Vehicle Association shortly afterwards, he stated 
that a plan was being considered of subscribing to a large number 
of those papers and distributing them among prominent members to 
be read and clipped. He wrote that he considered that much good 
would result from the agitation. 

Further evidence that the campaign was producing results was pre- 
sented in 1912 in a letter of the secretary and general manager of the 
National Implement & Vehicle Association to the secretary of the 
dealers' Federation, in which he said that he had received a state- 
ment from one of the companies belonging to the associj.tion, saymg 
that it had taken up the matter of favoring catalogue-house methods, 
with the entire list of 70 papers in which it advertised and had 
received a declaration from each declaring that editorial indorsement 
would not be given to mail-order houses. 

In August, 1913, the Implement Dealers' Bulletin called attention 
to a convention of the publishers of country newspapers that had 
just been held at Chicago, at which the subject of mail-order adver- 
tising was one of the principal topics discussed. The Bulletin stated 
that it had been the consensus of opinion that all such advertismg 
should be eliminated, although a few of the delegates took the posi- 
tion that they could not refuse the mail-order contracts unless the 
merchants gave them more patronage. Possibly, as the result of 
this attitude on the part of some of the publishers, the delegates at 
the annual meeting of the implement dealers' National Federation 
went on record in favor of the manufacturers giving more attention 
to local papers in placing advertising and less to farm papers, after 
the secretary of the Federation had compared the relative merits 
of the two methods of advertising, asserting that practically every 
farm paper advocates, either directly or by implication, patronage 
of mail-order houses, while the local country newspaper helps to 
build up the trade of the home merchant. He declared that it was a 
ftubject that concerns the business success of manufacturer, jobber, 
and dealer alike. The subject was considered at a conference between 
representatives of the dealers' Federation and of the National Im- 
plement & Vehicle Association in October, 1913, with a view to sug- 
gesting to manufacturers the advisability of trying out local news- 
papers. The Illinois implement dealers' association adopted a reso- 
lution to th effect chat manufacturers selling to dealers should not 
advertise in farm papers which advocate mail-order buying, and 
one of the local clubs of dealers in Kansas appointed a committee to 



.-i 



206 



FARM-MACHINERY TRADE ASS0GUTI0N8. 



-< 



ili 



confer with the newspapers in the county to devise ways and means 
for increasing the advertising in home papers and eliminating some 
of the advertisements in the farm papers. Furthermore, the mem- 
bers of the Western association adopted resohitions expressing the 
belief that a more liberal use of the local county papers by the man- 
ufacturers in advertising their goods would be of greater benefit to 
the dealers generally than the use of farm papers and would elimi- 
nate much of the direct sales' controversy. 

The position taken by the National Federation of Implement & 
Vehicle Dealers' Associations and the National Implement & Vehicle 
Association against the indorsement by farm papers of mail-order 
houses and mail-order buying seems to have had some success, for in 
December, 1914, a resolution on the subject was adopted by the 
Agricultural Publishers' Association, composed of about 40 of the 
leading farm papers. This resolution read as follows : 

Resolved^ That it is the sense of the members of the Agricul- 
tural Publishers' Association that the farm papers of America 
do exclude from their colunms copy attacking retail or whole- 
sale dealers, assailing advertisers selling either direct or through 
dealers, or reflecting in any unfair manner upon a competitor in 
business. 

Chautauqua home-trade talks. — ^Another plan designed to cur- 
tail the competition of mail-order houses had meantime been put on 
foot by the National Federation of Retail Merchants. The idea was 
to build up sentiment in favor of home trading by means of ad- 
dresses at Chautauqua meetings, advocating the preservation of the 
retail business for the home merchants. In July, 1913, the Imple- 
ment Dealers' Bulletin indorsed the plan and announced that the 
movement would be given all the encouragement that implement and 
hardware associations were able to wield. In October, 1913, the 
delegates to the annual meeting of the implement dealers' Federation 
voted to cooperate with the National Federation of Eetail Merchants 
in this matter. At the meeting of the Western association in Janu- 
ary, 1914, the members adopted resolutions pledging themselves to 
assist in securing as large an attendance as possible to hear the 
speakers on this subject and instructing the secretary of the associa- 
tion to cooperate with the Chautauqua bureaus in keeping members 
of the association informed concerning the dates of these lectures. 



^1 



CHAPTER Vn. 
PEEVENTION OT PEICE CUTTING AMONG COMPETING DEALERS. 

Section 1. Introduction. 

In addition to the prevention of price cutting, by suppressing the 
competition of irregular dealers and direct sellers, the dealers' asso- 
ciations are concerned with the maintenance of profitable prices 
among the regular dealers themselves. 

Manufacturers and other wholesalers are opposed to selling to 
dealers who are habitual price cutters. They desire that dealers 
shall make a profit in order that the latter may be better able to 
meet their obligations. Another motive of the manufacturers and 
wholesalers, apparently, in helping to keep up retail prices is that 
they may thereby be able to charge higher prices to the dealers. 

Section 2. Resale price maintenance. 

The dissatisfaction of the dealers with conditions in the binder 
trade in the later eighties and early nineties (see p. 15) led the deal- 
ers to request manufacturers and wholesalers to establish and main- 
tain uniform prices. In January, 1891, the members of the Western 
association adopted a resolution expressing the sense of the conven- 
tion that the manufacturer should cancel the contract of any retail 
dealer who was found to be cutting prices during the season. Its 
members sought the cooperation of the Kansas City jobbers. These 
efforts caused a memorial to be addressed to the various harvesting- 
machine companies by their representatives at Kansas City, one of 
the matters presented being the alleged necessity of establishing and 
maintaining uniform prices. This memorial read in part as follows ; 

It is apparent to all of us that prices have been greatly demor- 
alized by reports circulated by unscrupulous farmers, canvass- 
ers and local dealers, whose sole object has been to profit at the 
expense of the manufacturers, and we now pray that you follow 
the example of the heavier manufacturers and establish a uni- 
form price, both retail and net wholesale, on all harvesting 
machines, to be based on Missouri river freights for the territory 
covered by our respective agencies, to be maintained during the 

entire season of 1892. 

207 



208 



FARM-MACHINERY TRADE ASSOOUTIONS. 



\ 



Although the contracts of some of the binder manufacturers con- 
tained a provision requiring dealers to maintain retail prices fixed 
by the manufacturers, the pressure of competition among the latter 
seems to have been too strong for the strict enforcement of a pro- 
vision of this sort. 

At the annual meeting of the dealers' Federation in 1901, a year 
before the International Harvester Co. was organized, a resolution 
was adopted favoring the adoption of uniform retail prices by all 
the manufacturers of harvesting machinery and that local agents be 
required to maintain these prices. 

In 1904, the Federation again requested the various harvester 
manufacturers to establish and maintain a uniform minimum 
retail price for each territory. The International Harvester Co. 
replied that it would insist upon compliance with clause 5 in its 
agency contracts, under which the agent agreed to sell all machines 
or property received under the contract at such prices and on such 
terms as might be fixed in writing by the International Harvester 
Co. After 1905, however, this clause of the contract was omit- 
ted.* . 1. 1 1 

Within recent years manufacturers of farm machmery have largely 

discontinued the practice of fixing retail prices, althougli some com- 
panies have not yet done so. List prices, from which the dealers 
receive large discounts, are prmted in the agency contracts of various 
wholesalers, notably those handling plows and tillage implements. 
These list prices are sometimes intended to serve as a guide to the 
retail dealers in making their prices. (See p. 43.) 

Implement associations have been more active in pushing the cost- 
educational movement (see pp. 218-243) than pny other plan of 
retail-price maintenance. In January, 1915, however, the Western 
association not only indorsed the Stevens bill pending in Congress, 
but also the principle that the manufacturer, for his own protection 
and that of dealers, should have the right to set resale prices. 

Section 3. Price agreements among deftlen. 

Most of the early State and interstate associations of dealers that 
were formed recognized the difficulty of getting its members to adopt 
and adhere to fixed retail-price schedules. A principal objection to 
such efforts lay in the practical difficulty of fixing a uniform price on 
farm machines of different makes, sizes, and specifications, and secur- 
ing the observance of such prices among dealers scattered over a wide 
territory. Moreover, there was the danger of conflict with the anti- 

1 Report of the CommlSBioner of CorporaUono oa tlw IntoraaUoiua Hanrester Co., pp. 
310-315. 



-»'l 



PBEVBNTION OF PRICE CUTTING AMONG DEALERS. 



209 




trust laws. Most of these associations urged their members to observe 
profitable prices and not to cut them, the practice of price cutting to 
secure trade being referred to as an "unwise and short sighted policy." 
In a report by a trade paper of the proceedings at the annual con- 
vention of the Western association in January, 1893, it was stated: 

Towards the close of the convention * * * [one memljer 
of the association] struck the keynote in plans for preventing 
demoralization in the retail trade when he told of the agree- 
ment he had entered into with the dealers in his town, fixing a 
retail price on all the goods they sold. 

In January, 1894, the harvester committee of the Western associa- 
tion reported that the managers of several of the harvesting-machine 
companies recommended that "the retail implement dealers should 
establish a uniform retail price among themselves.'* 

The adoption of a schedule of prices below which dealers agreed 
not to sell seemed to assure a larger profit to all. But when such an 
agreement was entered into the dealer who cut prices had a great 
advantage over the dealer who attempted to hold to the agreed 
prices. Hence, they generally proved a failure because no practicable 
means could be found to enforce the agreement. Several instances 
have been found where price agreements have bee?i entered into by 
dealers in local competition with each other. Most of these are of 
an early date, but others are more recent. 

In 1899 dealers in Lancaster County, Nebr., maintained an agreed 
schedule of uniform minimum prices. A year or two later the plan 
was extended to other dealers in southern Nebraska, the South Platte 
association being formed. For several years the latter association 
attempted to maintain a list of minimum retail prices that had been 
prepared by its president, a dealer in Lancaster County. In 1904 it 
was reported that the plan was working well, but these efforts are 
said to have led to the collapse of the association a few years later. 

In September, 1903, the Implement Dealers' Bulletin stated that 
the subject of prices usually occupied some of the time at each meet- 
ing of a local organization that had been formed among dealers in 
northeastern Kansas. It was stated, however, that no ironclad agree- 
ments were made, and hence no penalties were needed. During 1908 
dealers in Marshall and Kittson Counties, Minn., agreed upon a price 
list for binders, mowers, and rakes, and in 1904 two dealers at War- 
ren, Minn., signed a similar agreement. No information is avail- 
able to indicate the extent to which these lists were adhered to. 
Later, dealers in the vicinity of Olivia, Minn., and others around 
Devil's Lake, N. Dak., adopted price lists, which, it is said, were not 
closely followed. 

68248"— 15 ^14 



^> I • 



210 



FAEM-MACHINEBY TBAOE ASSOCIATIONa 



! 



Ill 



In April, 1904, an association was formed among dealers in Jack- 
•son County, Mich, Later this association adopted a resolution 
requesting all members to add not less than 26 per cent to the cost 
price to make a selling price. 

The Fargo District Implement Dealers' Association, consisting of 
some 40 dealers, organized in May, 1904, to better conditions in the 
territory about Fargo, N. Dak., adopted a schedule of minimum per- 
centages of profit on the cost of goods sold. On drills not less than 
20 per cent of the cost was to be added to the cost of the goods plus 
freight; on gang plows and harroWs, 15 per cent; on binders, the 
International schedule was to be followed, while mowers were to be 
sold at $46 and $48, according to size ; on gasoline engines, rakes, and 
buggies, at least 25 per cent; while on twine, not less than 2 cents net 
per pound was to be added to the cost. It is claimed that these rules 
were not binding and that they were not closely observed. 

An association organized at Bismarck, N. Dak., in March, 1904, 
known as the Missouri Slope Retail Implement Dealers' Association, 
is said to have included dealers in two-thirds of North Dakota. An 
important feature of the work of this association was the adoption 
of retail price lists in 1907 and 1909. This association appears to 
have held no meetings after 1909. An organization composed of 
four implement dealers at Dickinson, N. Dak., did not use the price 
list furnished by the Missouri Slope Retail Implement Dealers' Asso- 
ciation, which was regarded as too low for that territory, but agreed 
upon a list of their own. A copy of this list was hung in the store 
of each member and was adhered to fairly closely in 1911, according 
to the dealers, though there was no penalty for failure to do so. 

In 1908, and again in 1909, a number of dealers in the vicinity of 
Grafton, N. Dak., met and adopted a list of retail prices, although 
it is stated that the dealers were not obliged to hold to these prices. 
In February, 1910, members of an organization formed at Crookston, 
Minn., composed of dealers in two adjoining counties, agreed upon 
& retail price list, copies of which were distributed among the dealers. 
It is stated that these prices were fairly well maintained. A local 
club of dealers in Brown County, S. Dak., is also reported to have 
made an agreement on prices. 

Doubtless an exhaustive inquiry into the extent to which price 
agreements have been entered into among local dealers would dis- 
close instances in addition to those cited above. Enough has been 
said to show that this method of price maintenance has not been 
unknown to the retail implement trade. 

The relation of local clubs to price agreements is discussed gener- 
ally in the following section, while further references thereto may be 
found in connection with the cost educational propaganda (see p. 218). 



PEEVENTION OF PRICE CUTTING AMONG DEALERS. 



211 



Section 4. Exchange of information through local clubs. 

At the annual convention of the Western association in January, 
1893, the president stated that one of the greatest evils that the 
dealers had to contend with was the cutting of prices among them- 
selves. In this connection, he made the following suggestions : 

Maintain your prices. Let us be honest in this, and let us 
transmit this feelmg to each of our competitors. By meeting 
here, becoming acquainted, and talking these things oyer, will 
have a tendency to make us better friends and we will think 
kindlier of our competitors. We will be very much more apt to 
maintain prices ourselves, besides we shall not hear so much of 
our neighbor cutting prices. The result will be that the imple- 
ment business will be pleasanter and appreciably more profitable. 

At the convention of the Western association held the following 
year (1894) one of the dealers present at the convention urged that 
dealers should cultivate a more friendly feeling among themselves, 
but it was not until two years later that the associ^ition adopted a 
resolution to the effect that — 

We believe that local organization is now the paramount ob- 
ject to be attained and that we commend it to the wise considera- 
tion of all implement and vehicle dealers. 

In March, 1896, the Implement Dealers' Bulletin stated that the 

board of directors of the Western association were very anxious to 

have dealers carry out the resolution that had been adopted favoring 

local organization. It had already been pointed out (see p. 16) that 

it was not the province of the Western association to regulate prices, 

but it had also been asserted that the elimination of price cutting was 

an important benefit of local organizations. In this connection, an 

editorial in the Implement Dealers' Bulletin in September, 1899, 

stated : 

This association has never tried to control the prices at which 
dealers should sell their goods, believing that all efforts in that 
direction would be in vain ; but it certainly can be of some service 
to its members in such cases by exerting a friendly influence over 
those who persist in doing business for glory and not for profit, 
and any such influence it can wield to stop a war on prices that 
yields absolutely no profits to those who engage in it, should be 
exerted. The association has already accomplished much good in 
this direction among its members by cultivating a more friendly 
feeling among them. * ♦ * "We do not advocate exorbitant 
prices but a fair margin you must have or you can not continue 
m business very long. 

During these years, however, many dealers continued to cut prices, 
and in September, 1901, the Implement Dealers' Bulletin asserted 
that the binder business was thoroughly demoralized and that the 



i 



212 



FARM-MACHINERY TRADE ASSOCIATIONS. 



II 



price cutting had been done by the manufacturers. The Bulletin 
went on to say : 

They are the ones who went to their agents and said, " Here, we 
want this business and we want you to get it regardless of price, 
and at settlement time you will be rewarded amply for your 
trouble." 
This situation apparently led to the request to the harvester manu- 
facturers to use their influence to maintain retail prices. (See p. — .) 
Price cutting among retailers was discussed in letters published in 
the Implement Dealers' Bulletin during 1902. The remedy proposed 
was to " sell at fair margins and quit our strife and jealousies among 
ourselves." 

In February, 1903, the Bulletin published a letter from one of the 
members of the Western association calling attention to the value of 
personal acquaintance among competing dealers. He asked the fol- 
lowing question: 

Is it any wonder our customers " work " us, when we consider 
that most of us don't see our competitor down street once a 
month ? 
He expressed the opinion that the association meetings were of 
some benefit in this way, but continued as follows : 

But they don't get down to the sore spot. Nothing ever will 
do that except personal acauaintance, and the very bigness of 
our convention meetings makes it practically impossible to have 
much more than a n(3 or a hand shake with our competitors 
while there. ♦ • ♦ 

Fact is we've got to take this matter into our own hands, in a 
local way, if we are to enjoy the full benefit of trade organiza- 
tion. * ♦ * Suppose we organize a social club among the deal- 
ers in our line, in each county or section of two or three counties. 
We can have our regular officers, constitutions, by-laws, dues, 
etc. Once a month will be often enough to meet. If there are six 
good towns in our territory we will meet in first one town and 
then another, until we cover all six, and then begin over again. 
Let the dealers in the town where we're going to meet next, act 
as a committee on entertainment. Have a good time and plenty 
of cigars, and talk over business propositions while we smoke. 
Foot the bill out of the treasury, or let each member pay for his 
own plate. Once in a while take the ladies, acquaintance among 
them will do us a lot of good. It will be more trouble for us to 
get together than it is for the jobbers club, but the result will be 
just as satisfactory and as profitable in the end. Any way we've 
got to do somethmg, and if somebody doesn't suggest a better 
plan, let's try this. 
This letter was followed by another published in the Bulletin in 
May, 1903, on the subject of local associations as a remedy for price 
cutting. This letter read as follows : 

The large membership in the Western Retail Implement and 
Vehicle Dealers' Association is of itself sufficient evidence, that 



! 



PREVENTION OF PRICE CUTTING AMONG DEALERS. 213 

it pays the eligible retailer to be a part of such organization. 
The benefits of such membership are many and substantial, but 
I wish to refer to a single benefit that in itself repays many of 
us annually for the expense of membership and attendance at 
our Kansas City convention. I refer to the price cutting evil. 
While this has perhaps not been very generally discussed in our 
sessions the past two or three years, it is so generally discussed 
amon<' the dealers in relating business experiences, and the tolly 
of same so unanimously admitted, that we return to our places 
of business fully determined to stand for a reasonable protit. in 
fact our backbones are stiffened up for several weeks, and per- 
haps if our conventions occurred three or four times a year, the 
stiff backbone might become chronic. ^ 

Right here is where the local association meeting once a month 
would make us some money. I^t the big associations work to- 
gether to combat the general evils that require large numbers 
and wide influence to correct, but the local association will do 
much toward " keeping us good " in this particular. 

Often what we need most to maintain a fair profat is a better 
feeline toward our competitors. Some of us know, and perhaps 
like every man in our town better than we do our competitor, 
and' in no way can a better acquaintance and feeling for him be 
brought about than through the formation of a local association, 
where we can meet and become acquainted, exchange experi- 
ences profitably and talk in reasonable confidence. 

It enlarges our views to discuss business matters frankly with 
our competitor. He is in a legitimate business to make money; 
we can't have all the business, but let us make a fair profit on 
that we do have, and that we can't get let him have on the same 
basis and stand together to keep the business on a business plane. 

This was followed by an editorial on the subject of " Local clubs " 
in the Bulletin for September, 1903, which read in part as follows : 

There is no question but what the organization of local 
clubs will help to solve the price cutting evil and place the 
implement and vehicle business upon a much better and more 
satisfactory basis, that is, if they are conducted along proper 
lines. Many dealers shrink from giving any encouragenient 
to a movement of this kind because it usually carries with it 
an agieement on prices, and they claim that such an agreement 
gives the unscrupulous dealer an undue advantage over the one 
\^ ho wishes to live up to the letter of the agreement. 

That they can be formed and made to greatly benefit members 
has been demonstrated by the dealers of northeast Kansas ; they 
went home from the last convention thoroughly imbued with the 
idea that much of the trouble they had had in holding their 
business up to a standard which made it profitable was on account 
of the lack of better acquaintance among the dealers, and a few 
of them in discussing the matter concluded to make an effort 
to organize the dealers of their vicinity who came in close com- 
petition with each other. A call was issued and the organiza- 
tion perfected. * ♦ ♦ They meet quarterly, discuss trade 
topics, the credit of customers, and have a regular experience 



ii 



214 FARM-MACHINERY TRADE ASSOCIATIONS. 

meeting. The subject of prices usually occupies some of the 
time of each meeting, but no iron-claa agreements are made, 
lience no penalties are needed. 

The members say that their coming together in this friendly 
way enables them to know each other better and gives them 
greater confidence in each other, and they find that all are in 
business with the same object in view, viz, for profit. They 
are not so suspicious of each other as formerly, do not believe 
every report they hear concerning the price cutting their com- 
petitors are doing. 

• • • • • 9 • 

There are plentv of counties where similar clubs could be 
started and probably maintained if some one would take the 
initiative. We would like to hear from our members on the 
subject 

In October, 1903, another editorial on the same subject in the 
Bulletin made the following comment : 

Some thhik that the establishment of prices is the only thing 
to be gained by local organizations. We think this is a mistake. 
The price-cutting evil will soon regulate itself after the dealers 
become friendly and confidence is well established. They will 
suddenly come to the conclusion that they are all in business 
for profit, and to succeed all must maintain about the same 
margin above the cost of their goods. As adjuncts to the State 
or interstate associations such organizations or clubs would be 
invaluable, and should receive the encouragement and support 
of every dealer. 

At the annual meeting of the Federation in October, 1903, plans 
were perfected whereby all constituent associations might work in 
close harmony in encouraging the formation of local clubs, In 
November, 1903, the Bulletin announced that the movement to form 
local clubs was growing rapidly. In January, 1904, it reported the 
organization of a local club by dealers in Crawford and Cherokee 
Counties, Kans. In that month Local Club No. 3 was formed by 
dealers at Carthage, Mo., its purpose being stated to be that "of 
perfecting a better system for the extending of credits to their 
customers and for the further purpose of presenting a solid front in 
opposition to catalogue house business and for the further purpose 
of social intercourse." 

In Mferch, 1904, the secretary of the Western association reported 
that five local clubs had been organized, and the directors of the 
lissociation appointed a committee on local clubs. In November, 
1904, the Federation adopted the following resolution: 

Believing that until we can sustain more fraternal relations 
at home among ourselves as competitors, the constituent asso- 
ciations of the Federation can not accomplish their full measure 
of usefulness, we, your committee, would urge a still more 
earnest effort upon the part of our several official boards to pro- 
mote among their memberships the formation of local clubs or 
social organizations. 



PREVENTION OF PRICE CUTTING AMONG DEALERS. 



215 



The Bulletin for January, 1905, which had been adopted as the 
official organ of the National Federation, emphasized the necessity of 
local clubs as a part of the education of dealers upon the subject of 
the cost of doing business and made the following statements : 

The profits in the implement business are unsatisfactory. 
m ***** ^ 

The price cutting policy is unbusinesslike and ruinous and 
the remedy for these adverse conditions seems to be organizing 
locally and procuring more friendly cooperation. 

In the early part of 1905 a committee of the Western association 
was appointed to prepare a uniform set of rules for the guidance of 
all "locals" organized as auxiliaries of that association, and later 
in the year the Bulletin announced that " ready-made helps " for 
the organization of local clubs, consisting of articles of association, 
by-laws, a form of application for membership, and r. suggested 
form of letter to be used in starting club work, had been pro- 
vided. In January, 1907, the local-club movement was given con- 
siderable impetus at the convention of the Western association. At 
this time notes regarding the proceedings of local clubs had become 
a regular feature of the Implement Dealers' Bulletin. The Bulletin 
asserted that the local club was one of the vital factors in the life 
of the general association and of the trade itself. It expressed the 
belief that in the local club lay the most potent possibilities for 
overcoming " the evils of the business ; " that in a local club could 
be settled all the little personal differences and grievances and a 
spirit of fairness and fraternity engendered, which would tend to 
abolish price cutting and backbiting, and enable dealers to unite in 
plans to outwit the catalogue house " and other prowling wolves of 
trade." 

At the annual meeting of the Federation in October. 1907, the presi- 
dent referred to the progress that had been made in the organization 
of local clubs as follows: 

The organization of local clubs has not been as general as we 
hoped for at the beginning of the year. The Western associa- 
tion has inaugurated a vigorous movement along this line. There 
has been some progress in the Oklahoma association, and our 
Iowa association has made a start. The organization of local 
clubs should be encouraged by every association. Lack of confi- 
dence and acquaintance among dealers is the principal cause for 
local jealousy and misunderstanding, generally resulting in un- 
pleasant and unprofitable conditions. Let us give this important 
subject more attention. 

He also asserted that — 

On account of the high-priced material and the scarcity of 
labor, * * * we will be obliged to assist manufacturers in 
establishing a general advance in the price of all finished goods 
in our line. As an organization this Federation has never re- 



21^ FABM-MAGHINERT TBADE ASSOCIATIONS. 

garded with favor any proposition which contemplates a price 
schedule, as such would certainly arouse the just opposition of 
our farmer patrons. The same conditions govern our relations 
with the manufacturers. The situation demands an advance. We 
had notice a year ago of this advance. In admitting the justice 
and necessity for an advance in prices we deplore conditions 
which eliminate free and active competition between manu- 
facturers in any line, and such combinations should meet with 
the opposition of the retail dealer everywhere. 

In December the Bulletin referred to the matter of advancing 
prices in an article which read as follows : 

With the steadily advancing prices of all goods in the imple- 
ment, vehicle and hardware lines has come a very perceptible 
reduction in the profits to the retailer. A majority have been 
timid about advancing the retail prices as the increased costs 
seemed to justify. 

Again, too many dealers fail to take into account the expense 
of marketing their goods when deciding upon their selling price. 
In a majority of cases the invoice price and transportation 
. charges are about all that are considered when figuring costs. 

This is the time of the year for taking the annual inventory 
and figuring up the year's business, and it will be an easy matter 
to ascertain what the percentage of expense has been for con- 
ducting the business the past year, and when arranging a schedule 
of prices for the coming season this should be added to the cost 
and carriage and the percentage of profit added to that. 

It will be found that a thorough knowledge of what it costs 
to sell goods will have a stimulating effect in maintaining prices, 
and no dealer has his business well in hand who does not possess 
this knowledge. 

This important subject will be discussed at the convention, and 
no matter how long you have been in the business or how well 
satisfied you are with your present methods, you will pick up 
some pointers that are of value to you. 

The necessity for increased prices because of increased cost of 
materials had already been referred to by the chairman of the 
executive committee of the National Association of Agricultural 
Implement & Vehicle Manufacturers at a conference in January, 1907, 
between representatives of that association and of the Western asso- 
ciation. In his explanation the chairman admonished the dealers, as 
follows : 

Locally you should have an understanding among yourselves 
as to what is a fair price, and stick to it. Your local orgahiza- 
tion is to be your salvation. 

The advantages of local clubs were pointed out in a letter from the 
chairman of the Federation's committee on local clubs published in 
the Bulletin for November, 1908. This letter read in part as follows: 

We have our State or district associations to work for the bet- 
terment of conditions and protect the interests of the dealers in 



PBEVENTION OF PRICE CUTTING AMONG DEALERS. 



217 



their territory and protect their members, through their legisla- 
tive, insurance and complaint committees. 

We have our National Federation to help the State and district 
associations, meet the various national manufacturers' associa- 
tions, and look after the matters of national importance. 

But in order to make the work of the National Federation and 

the State associations of the greatest benefit to the individual 

firms we should have the local associations, for the improvement 

of the whole must come from the improvement of the individuals. 

♦ *♦♦♦** 

The question of territory to be covered by a local association is 
important. It should be the territory surrounding a central, or 
easily and cheaply accessible town, such as most county seats. 

A local association can organize with officers and committees 
on complaints, credits, catalogue house, collections, exchange, 
legal mattei-s, and auxiliary to the State or district association. 
Make annual dues low as possible. Adopt uniform blank orders 
and notes, uniform terms for sales and settlements, cut out trad- 
ing for old goods, canvassing, and delivering goods, secure list 
of catalogue house patrons, make lists of slow and dead-beat 
customers, protect against auctions and peddlers, save expense 
in legal matters, make progress, profit and protection. 

Will you work or be worked? 

A letter on the same subject from a member of the Western asiso- 
«nation, published in the Bulletin in July, 1908, read in part as fol- 
lows : 

I am frank to say that we can never hope to get all our neigh- 
bor dealers to join our local clubs. * * * 

Those who hesitate to join local clubs on account of a feel- 
ing that they are combinations that fix and raise prices can 
disabuse their minds of any such idea, as there are so many 
more important things than the matter of retail price, things 
that are sapping our very business life every day, that there 
is no time for such foolishness as talking about fixing retail 
prices. 
The secretary of the Federation asserted in 1912 that the mainte- 
nance of a price schedule, by a local club of dealers, is neither prac- 
ticable nor possible. In this connection, he said : 

There are but few, if any, local clubs that include jn their 
membership all of the competitors in any locality, hence the 
impossibility of having any price agreement. 

No evidence is available to show whether the members of any of 
the local clubs organized as auxiliaries of the federated associations 
during this period made any effective agreements as to uniform 
prices. The formation of such clubs by bringing together dealers 
in active competition with each other in various localities must have 
had more or less of a tendency to influence retail prices and must 
have offered some temptation to make price agreements, iilthough the 



218 



FARM-MACHINERY TRADE ASSOCIATIONS, 



PREVENTION OF PRICE CUTTING AMONG DEALERS. 



219 



Federation and its constituent associations did not encourage such 
activity among members of local clubs. As shown abovv, the Bulle- 
tin took the position that the practice of price cutting would regulate 
itself as dealers became more friendly and confidence established. 
In connection with the cost educational campaign discussed in the 
following section, frequent reference is made to subsequent activities 
in the promotion of local clubs by the manufacturers' and dealers' 
associations. 

Section S. Priees based on nniform method of compnting costs. 

The unsatisfactory condition of the retail trade in farm wagons 
in 1906 resulted, in November of that year, in the determination by '■ 
the National Wagon Manufacturers' Association to investigate terms 
with a view to bettering the general conditions. The Kansas City 
implement jobbers' club had already started an educational campaign 
among the dealers in behalf of higher retail prices and shorter terms. 
The undertaking of the wagon manufacturers eventually resolved 
itself into an organized movement to secure the maintenance of better 
retail prices by educating dealers in their costs of doing business, 
according to a plan of cost accounting advocated by the Ct»st Edu- 
cationml Association. (See p. 228.) 

In starting this movement in a systematic way the secretary of 
the National Wagon Manufacturers' Association, in November, 
1908, addressed a letter to the principal journals devoted to the 
interests of the retail implement and vehicle dealers. This letter, 
which was not intended for publication, explained the conditions as 
viewed by the writer and asked a statement of opinions from the 
several editors in regard to starting a campaign of education. This 
was followed shortly afterwards by a bulletin issued to the members 
of the wagon association on the subject of "Educating your cus- 
tomera and its bearing on the trade." In this bulletin the secretary 
explained the influence of prices made by inexperienced dealers on 
trade conditions. This bulletin read in part as follows: 

Reliable information shows that out of every hundred dealers 
20 to 40 fatly sell out, or give up this line each year, mainly be- 
caujse it has not paid. Why? Principally because the greater 
number entering this line come from the farm with a knowledge 
of the use of what they sell but little or no business education 
to help them to success, so that when the wagon and implement 
salesmen load them up and leave them to their own devices, 
without a word of instruction or suggestion, it is not strange 
that they commit the error of adding only a dollar or two above 
the factory cost and freight and calling it profit. Then, when 
the season^s business shows little or no profit, they change their 
lines, seeking lower prices, until the sheriff gets them or they sell 
out to some other unfortunate. This class of dealer is the kind 



.A] 



nr i) 



the good dealer is always complaining of and the kind that 
causes him to drop the handling of wagons. Well, what are you 
going to do about it? 

This is a statement and question I have just put up to the most 
prominent plow and implement manufacturers and jobbers, 
dealers' associations and trade papers, throughout the country, 
together with the following suggestions: 

1. Start simultaneously an educational campaign and stick 
to it. 

2. Let manufacturers and jobbers make an effort through their 
selling and advertising forces. 

3. Trade journals to cooperate in able editorials and telling 
illustrations in cost and profit figuring. 

4. Dealers' organizations, by making ^^cost-expense and 
profit " the most prominent subject at their conventions and 
the appointment of a standing committee, who, with the secre- 
tary, will send information monthly to their members. 

6. Personal effort on the part of the traveling salesmen to 
urge the dealer to retail the goods he sells them at more profit- 
able prices. 

The answers have been coming in every day, and the largest 
majority say the idea is right and they will help — only a few 
say it might succeed but they are doubtful, still suggest no other 
remedy for this serious situation. 

»♦♦♦♦•* 

The trade journals are ready and willing to cooperate, glad 
to. The dealers' associations, though blaming the manufac- 
turers and jobbers for many of their ills, say they will gladly 
cooperate, and have already given the question a prominent part 
in their convention programs and we have supplied the speakers 
with much effective data — also the manufacturers who will speak 
to them at conventions of the Illinois, Wisconsin, and Iowa asso- 
ciations, one of whom is our executive chairman, Mr. Kinney, 
who will put the matter to them strongly; we will urge the later 
conventions in like manner. 

Don't you see that if we can educate our trade how to figure 
complete costs, as we ourselves have learned and benefited by it, 
then they will know the danger line separating cost from profit — 
few throw away profit knowingly, but many do so ignorantly. 

I inclose a little illustration entitled " Figuring costs " which 
is worth while noting: See how a margin that looks large dwin- 
dles down to insufficient profit when actual cost and expense is 

•deducted. 

If the annual expense of the dealer is 10, 15, or 20 per cent of 
his selling price, where does he get off in selling two-horse wagons 
at $5 more than factory price and freight? And are we wise 
in letting the dealer drift along until he finds this out and drops 
wagons, or will it not be better to back him up in getting prices 
that will make the business profitable and interesting and so 
help ourselves? 

If we take up this campaign, with the cooperation of the other 
lines I have mentioned, it will mean a long, persistent fight, and 
no one should enlist " to give it a trial," for it is either right or 



220 FABM-MACHINERY TRADE ASSOCIATIONS. 

wrong, and if right, means the preservation of our business, but 
will take time and energy. 

I desire very much jrour opinion of the matter before our 
meeting next week, for m event of a majority favoring the plan, 
we want to line up the other associations and get the movement 
started to affect 1909 trade as early as possible. 

This subject assumed greater importance by reason of the advance 
of 10 per cent in prices decided upon by the wagon association at 
that time. (See p. 371.) The manufacturers appear to have realized 
that it would be diificult to maintain this advance unless the dealers 
were awakened to the importance of making a similar advance in 
i-etail prices. At a meeting of the wagon association the secretary 
reported that various branches of the trade were developing great 
intei-est in the subject of a general inquiry into costs of doing busi- 
ness, especially as it affected the inexperienced dealers, and on recom- 
mendation of the secretary it was voted " that we recommend that 
all members of the association become interested and cooperate 
earnestly and effectively along the lines suggested, and those that 
may be shown in working out a practical plan, and that we will 
unite with other industrial associations furnishing goods that go to 
the farmers through the dealer in doing everything we reasonably 
can to urge upon the dealer the necessity of cost knowledge and sup- 
porting him in obtaining better returns on his sales to the consumer." 

During the convention of the Western association at Kansas City 
in January, 1909, a very important conference was held by repre- 
sentatives of the dealers, manufacturers, jobbers, and trade papers, 
to consider the cost educational work as a remedy for the reduced 
profits in the sale of implements and vehicles. A committee on per- 
manent organization * was appointed and it was '' recommended that 
the matter of permanent organization be referred to the president 
and secretary of the several implement and vehicle manufacturers 
associations, the National Federation and to delegates from each 
of the implement and vehicle clubs of the large implement trade 
centers." 

» Tbis committee as appointed was to l>e made up of the president and the secretary of 
the following associations : National Wagon Manufacturers' Association, Carriage Munu- 
facti:rer%' Association of America, Carriage Builders' National Association, National Plow 
Association, National Association of Agricultural Implement & Vehicle Manufacturers. 
National Federation of Retail Implement & Vehicle Dealers' Associations; also two dolo- 
gates from each of the Implement and vehicle clubs of Jobbers at Kansas City, St. Louis, 
Minneapolis. Dallas, Omaha, Oklahoma City. Dea Moines, and Peoria ; also the Implement 
trade ioumals by accredited representatives. The secretary of the National Wagon Manu- 
facturers' Association was elected chairman. 

The duties of this special committee were to Investigate the existing conditions and to 
report the result, with their recommendations of possible remedies, to a Joint meeting of 
the committee and the National Federation of Retail Implemont & Vehicle Dealers' Asso- 
ciations, at the time of the tatter's annual meeting in the fall. The report was particu- 
larly to inciude suggestions as to the advisability of effecting a permanent organization to 
carrj out all recommendations finally made and adopted. 



PREVENTION OF PRICE CUTTING AMONG DEALERS. 



221 



r 



#1^ 



During January, 1909, the secretary of the wagon manufacturers' 
association addressed conventions of dealers' associations at Minne- 
apolis and Kansas City on the subject of costs. The same month 
another representative of the association addressed a meeting of 
dealers at Portland, Oreg. In connection with these addresses, the 
secretary, in a bulletin dated January 29, stated : 

You have already learned from the convention reports pub- 
lished in the trade journals how this movement among manu- 
facturers, jobbers and dealers' organizations has taken hold 
all over the country, and that a conference will be held at Chi- 
cago to effect a permanent organization along these lines in the 
near future. 

It simply means that we must take a hand in the education 
of our trade if we would have them realize the increased cost 
of our product and at the same time realize that their prices 
must also be advanced to maintain their profits. 

In February, 1909, the secretary sent a letter to secretaries of 
various dealers' associations, inclosing blank for the purpose of 
gathering data to be used in the preparation of a cost-finding sys- 
tem, and in March he issued a bulletin to members of the wagon 
association, stating that the inquiry had disclosed a lack of infor- 
mation among retailers in the matter of their costs and that most of 
the figures that had been submitted were marked " estimtited." In 
this bulletin he also said in part : 

Would it not be worth while at this time, when your cus- 
tomers may be fighting your May 1 advance, or tryinji to beat 
down your prices (which seems to be the only way they can 
think of to make money), that you instruct your travelers to 
learn what your wagons are retailed at, and show them how to 
make money on them if they are not doing so — you can also do 
much from your office along these lines, in fact, as this matter 
of cost knowledge is necessary in all lines handled, your efforts 
to aid your trade this way will promote better acquaintance, 
and when your customer is convinced he is making money on 
your line he will not readily yield to your competitors. 

Recently, a jobber in selling a certain wagon insisted on 
knowing the price at which the dealer would retail it, and re- 
fused to give territory and the agency of the wagon to anyone 
whose retail price would not yield him a good profit. The job- 
ber stated to me that he had found enough dealers attracted 
by this practical guarantee of a good profit to give him a very 
satisfactory trade. His plan is entirely legal, and you could 
not take his customers, as they are more interested in the profit 
they get than the price they pay for the wagon. I am firmly 
convinced that this plan is practical and can be followed suc- 
cessfully with any wagon of good standing and merit if placed 
in intelligent hands and a sufficient amount of territory given. 



u 



\ 



220 FARM-MACHINEBY TBADE ASSOCIATIONS. 

wrong, and if right, means the preservation of our business, but 
will take time and energy. 

I desire very much jrour opinion of the matter before our 
meeting next week, for in event of a majority favoring the plan, 
we want to line up the other associations and get the movement 
started to affect 1909 trade as early as possible. 

This subject assumed greater importance by reason of the advance 
of 10 per cent in prices decided upon by the wagon association at 
that time. (See p. 371.) The manufacturers appear to have realized 
that it would be diiiicult to maintain this advance unless the dealers 
were awakened to the importance of making a similar advance in 
i"etail prices. At a meeting of the wagon association the secretary 
reported that various branches of the trade were developing great 
interest in the subject of a general inquiry into costs of doing busi- 
ness, especially as it affected the inexperienced dealers, and on recom- 
mendation of the secretary it was voted " that we recommend that 
all members of the association become interested and cooperate 
earnestly and effectively along the lines suggested, and those that 
may be shown in working out a practical plan, and that we will 
unite with other industrial associations furnishing goods that go to 
the farmers through the dealer in doing everything we reasonably 
can to urge upon the dealer the necessity of cost knowledge and sup- 
porting him in obtaining better returns on his sales to the consumer." 

During the convention of the Western association at Kansas City 
in January, 1909, a very important conference was held by repre- 
sentatives of the dealers, manufacturers, jobbers, and trade papers, 
to consider the cost educational work as a remedy for the reduced 
profits in the sale of implements and vehicles. A committee on per- 
manent organization ^ was appointed and it was '" recommended that 
the matter of permanent organization be referred to the president 
and secretary of the several implement and vehicle manufacturers 
associations, the National Federation and to delegates from each 
of the implement and vehicle clubs of the large implement trade 
centers." 

* This committee as appointed was to be made up of the president and the secretary of 
the following associations : National Wagon Manufacturers' Association, Carriage Manu- 
facturers' Association of America, Carriage Builders' National Association, National IMow 
Assoclaflon, National Association of Agricultural Implement & Vehicle Manufacturers. 
National Federation of Retail Implement & Vehicle Dealers' Associations; also two dele- 
gates from each of the Implement and vehicle clubs of Jobbers at Kansas City, St. I^uis, 
Minneapolis, Dallas, Omaha, Oklahoma City, Des Moines, and Peoria ; also the Implement 
trade Jonmals by accredited representatives. The secretary of the National Wagon Manu- 
facturers' Association was elected chairman. 

The duties of this special committee were to investigate the existing conditions and to 
report the result, with their recommendations of possible remedies, to a Joint meeting of 
the committee and the National Federation of Retail Implcmont & Vehicle Dealers' Asso- 
ciations, at the time of the latter's annual meeting in the fall. The report was particu- 
larly to Include suggestions as to the advisability of effecting a permanent organization to 
carry out all recommendations finally made and adopted. 



PBEVENTION OF PRICE CUTTING AMONG DEALERS. 



221 



« 



4 



During January, 1909, the secretary of the wagon manufacturers' 
association addressed conventions of dealers' associations at Minne- 
apolis and Kansas City on the subject of costs. The same month 
another representative of the association addressed a meeting of 
dealers at Portland, Oreg. In connection with these addresses, the 
secretary, in a bulletin dated January 29, stated : 

You have already learned from the convention reports pub- 
lished in the trade journals how this movement among manu- 
facturers, jobbers and dealers' organizations has taken hold 
all over the country, and that a conference will be held at Chi- 
cago to effect a permanent organization along these lines in the 

near future. , • i i i.- 

It simply means that we must take a hand m the education 
of our trade if we would have them realize the increased cost 
of our product and at the same time realize that their prices 
must also be advanced to maintain their profits. 

In February, 1909, the secretary sent a letter to secretaries of 
various dealers' associations, inclosing blank for the purpose of 
gathering data to be used in the preparation of a cost-finding sys- 
tem, and in March he issued a bulletin to members of the wagon 
association, stating that the inquiry had disclosed a lack of infor- 
mation among retailers in the matter of their costs and that most of 
the figures that had been submitted were marked " estimated." In 
this bulletin he also said in part : 

Would it not be worth while at this time, when your cus- 
tomers may be fighting your May 1 advance, or trying; to beat 
down your prices (which seems to be the only way they can 
think of to make money), that you instruct your travelers to 
learn what your wagons are retailed at, and show them how to 
make money on them if they are not doing so— you can also do 
much from your office along these lines, in fact, as this matter 
of cost knowledge is necessary in all lines handled, your efforts 
to aid your trade this way will promote better acquaintance, 
and when your customer is convinced he is making money on 
your line he will not readily yield to your competitors. 

Recently, a jobber in selling a certain wagon insisted on 
knowing the price at which the dealer would retail it, and re- 
fused to give territory and the agency of the wagon to anyone 
whose retail price would not yield him a good profit. The job- 
ber stated to me that he had found enough dealers attracted 
by this practical guarantee of a good profit to give him a very 
satisfactory trade. His plan is entirely legal, and you could 
not take his customers, as they are more interested m the vrofit 
they get than the price they pay for the wagon. I am firmly 
convinced that this plan is practical and can be followed suc- 
cessfully with any wagon of good standing and merit if placed 
in intelligent hands and a sufficient amount of territory given. 






j2aiSS 



7ARM-MAGHINEBT TBADE ASSOCIATIONS. 



PBEVENTION OP PBICE CUTTING AMONG DEALERS. 



223 



i 



Later in March, 1909, another bulletin was issued to the members 
of the wagon association, inclosing a form of letter which it was sug- 
gested might be sent out to the trade in helping along the campaign 
of cost education. This bulletin said in part : 

It is our aim, if these suggestions meet approval, to follow 
them later with more direct facts and figures, so as to convince 
the dealer that attention to this matter by him means real money 
profit. 

The form letter inclosed with this bulletin read as follows : 

Subject : " Better profits,^ 

Gentlemen : Are the profits you are making on the lines you 
are handling satisfactory, especially our make of wagons? If 
not, won't you tell us where the trouble is, for we believe that to- , 
gether we can find a remedy. 

Success or failure. — All who engage in business do so to make 
money, yet it is said 90 per cent fail to succeed — why ? — and are 
you and we to be counted with the 10 per cent of successes or 
the 90 per cent of failures? That depends largely on ourselves. 

The principal causes given for business failures are — inexperi- 
ence — lack of capital — lack of knowledge as to the cost of doing 
business — the last being the most important of all. 

When we engage in business and invest our capital, we aim to 
do three things ; first, to pay all expenses ; second, to provide for 
the living expenses of ourselves and families ; third, to make a 
clear gain on our investment after providing for these expenses, 
otherwise we would better loan our capital and work on a salary 
for someone else. 

Expense. — ^The great stumbling block seems to be that we do 
not get enough profit. Why? Because we do not know when 
we are asking a right measure of profit imless we have added 
the proper proportion of every item of expense to the invoice 
price and freight paid for each item to determine its total cost 
before adding profit. You may guess or estimate your expenses 
in fixing your selling prices, but bear in mind that when expense 
deals with your cash drawer it .demands full payment — not $4 
for $5 but 500 cents taken right out of your investment or 
profits. Do we realize that "Expense" is the greatest foe to 
business success, and must be known and controlled or failure 
must eventually follow? 

The following are some of the items that we should keep 
account of daily, no matter how small the amount is we pay out 
for them — then there will be a number of special expenses pecul- 
iar to your particular business, viz, interest on 'all capital in- 
vested (including borrowed money) ; rent (if the owner, what 
the property would rent for should be charged) ; salaries (wages 
of all help including members of firm) ; express, telephone and 
telegraph (not charged to customers); advertising; stationery, 
office supplies, postage and envelopes; dray age (goods received 
and goods delivered) ; fuel and lights; livery, horse feed, shoe- 
ing and wagon repairs; insurance and taxes; traveling expenses; 
store supplies and repairs; donations and subscriptions; losses 
on bad accounts and notes; attorney's fees and costs for collect- 



^ 



4 



« 1 



ing; depreciation on stock carried over; deductions and allow- 
ances to customers ; all other expenses. 

Salesmanship. — If you have not been applying the amount of 
your expenses before adding your profit, you will find a read- 
justment of many of your selling prices necessary — raising some 
and perhaps lowering others — but it is the only safe way to run 
a business and meet real competition. 

Competition is too intense to permit of anything but fair 
profits, and these both you and the manufacturer must have to 
keep out of the ranks of business failures. 

True salesmanship is selling goods at a profit, not price match- 
ing, that is often called "meeting competition," for it requires 
no brains or skill to give away good goods at the same price as 
one's competitor is offering an inferior line. Meeting competi- 
*' tion, in fact, is to know the superior merits of the goods you are 
handling and so impress them upon your customer that he will 
decide he wants them, just as you wanted them when the travel- 
ing salesman for the manufacturer convinced you of their 
merits. Price plays only a minor part with a good salesman or 
merchant — few goods are worth more than what they are 
sold for. 

If you have a competitor who is making a ruinous price on 
good goods, nine chances out of ten he is doing it ignorantly, and 
it will be money in your pocket to visit and show him your costs 
and his error ; but if you can not convince him, the more loss he 
makes the sooner he will go out of business — ^you can better 
afford to wait than go down with him, for his trade will leave 
him when they can not get goods at cut prices. 

Wagon costs. — ^Lastly, as to wagons, which are an indispens- 
able necessity but have fore several years past been sold at a very 
small profit, you can not give too close attention to your costs, 
profits, and readjustment of selling prices on them, for neces- 
sary advances must be made from time to time to meet the in- 
creasing cost of production, principally due to the growing short- 
age of wood materials, and the future holds no promise of lower 

costs. 

Trusting that something that we have said from our experi- 
ence may help you, and assuring you of our willingness to assist 
you in the increasing of your wagon trade to our mutual good, 
we remain 

Yours truly. 

Under date of April 9, 1909, another bulletin was issued to mem- 
• bers of the wagon association, calling attention to resolutions passed 
by the Empire State Implement Men's Club indorsing the movement 
to educate the implement and machine dealer in his costs of doing 
business and declaring that travelers should educate dealers to get 
better prices and more reasonable profits and, further, that travelers 
when canvassing with dealers should absolutely insist upon the deal- 
ers getting the regular retail price on every sale. In connection with 
these resolutions, the secretary of the wagon association stated: 

We educate our employees in every department of service to 
get the best results ; why should we not counsel with our travel- 



224 



FABM-MAGHINEBY TBADE ASSOCIATIONS. 



f 



L 



ers, and get their cooperation on such an important matter as 
this, for we know that it costs far less to hold old trade than to 
make new. A real salesman will be quick to see the value of this 
work, but one of the " What's the use " kind will continue to be 
a human expense account. 

The secretary continued to correspond with the secretaries of deal- 
ers' associations and with the trade journals on the subject of cost 
education, and, under date of October 7, 1909, a call was issued for a 
meeting at Kansas City of the special committee on costs appointed 
in January, 1909. (See p. 220.) This committee met October 21, the 
secretary of the National Wagon Manufacturers' Association acting 
as chairman, and rendered a report to the National Federation of Re- 
tail Implement & Vehicle Dealers' Associations then in session. This 
report showed considerable variation in the costs of different dealers 
in different parts of the country from whom figures had been ob- 
tained. It also embodied suggestions as to the items that should be 
included in computing costs. The dealers' Federation indorsed these 
suggestions and ordered a supply of them printed auvl sent to all 
constituent associations, with the request that a copy of them be 
placed in the hands of every member. (See p. 229.) It was stated by 
the secretary of the wagon manufacturers' association that — 

We expect to again meet with the Federation in January, at 
which time it is hoped plans can be formulated to place this cost 
effort on a practical and permanent basis, as the lack of cost 
knowledge is at the bottom of nearly all business trouble. 

The dealers expect cooperation from the manufacturers and 
jobbers in working out this problem, and we would suggest that 
you look over the above cost recommendations and if you are as 
impressed with their practicality as the dealers are, have a quan- 
tity of them printed m card or circular form and send them out 
to your customers by mail, also let your travelers call attention 
to them. Better grade merchants mean better grade customers. 

At the annual meeting of the wagon association in November, 
1909, the secretary made a report of the progress of the cost educa- 
tional movement, and the members adopted the following recom- 
mendation: 

That the important parts of this report and suggestions be 
printed and furnished members at cost for distribution to their 
trade and that fullest cooperation be given in urging the im- 
portance of the matter on one's customei-s. 

Referring to the influence of the cost educational movement in 
bettering conditions in the wagon trade, the secretary of the wagon 
association, in a bulletin issued December 20, 1909, said in part : 

The wagon business fell from being one of the most profitable 
lines handled by the dealer to one of very little profit by a com- 
bination of circumstances, which we discovered after the effect 



r 



PREVENTION OF PEICE CUTTING AMONG DEALERS. 



225 



i) 



# 



had reached us. Being compelled as we were to advance our 
prices to take care of increased cost, we neglected to urge 
strongly enough on our customers the necessity of likewise get- 
ting these advances, and the dealer, in ignorance of what it cost 
him to do business, believed he had sufficient margin of profit to 
permit absorbing most of these advances, so retail prices re- 
mained about stationary while the advances consumed his profit, 
and now there are almost numberless cases where dealers are in- 
different to wagons and many would not handle them if they 
were not an absolute necessity. Therefore, knowing that these 
are facts, how can we hope that somehow and sometime the 
wagon business will right itself if we sit, depressed and discour- 
aged waiting for something to turn up. 

Our customers are being greatly helped by their associations 
and organizations and the manufacturers in other lines are 
losing no opportunity to help them get more light, and as our 
line needs more attention than any other one they are handling, 
I feel that we shall make a very grave mistake if we do not join 
this forward movement to help along this effect to enlighten our 
trade as to the costs of doing business, which when fully realized 
will so adjust selling prices that wagons will be sought as a 
leading line and not handled as a necessity. 

Even if this plan is not a perfect one, the very agitation of the 
subject will direct more attention to wagons, which in itself will 
be helpful, but I feel confident that as we are on the verge of 
more prosperous conditions, and as we are perfectly well aware 
that there is no possible chance of being able to produce and sell 
wagons at any less than present prices, the sooner we can by 
any effort get the dealer to realize the status of the wagon, what 
it costs to handle it and what it ought to be sold for to be profit- 
able, the sooner we will get what we are hoping for. I have no 
patience whatever with a suggestion made not long ago, that 
many dealers do not know that they are losing money on wagons 
and if they discovered such to be the case they would stop hand- 
ling them. What could be worse than expecting to profit by a 
customer's ignorance, for if he is losing money on wagons 
through lack of cost Imowledge it is equally true that he is losing 
on other lines, consequently it is merely a choice between setting 
him right now and keepmg him permanently, or taking the 
usual receiver's dividend some day when suddenly he is com- 
pelled to quit business. 

It is our intention before sending out the cost suggestions, 
enclosed with my last bulletin, to enlarge and improve them by 
illustrated examples, of implements as well as vehicles, but I do 
not want to push this effort either in the face of a majority against 
it or passive indifference, which is worse, therefore I ask you 
whether this effort to bring the whole retail implement and ve- 
hicle business to a higher plane, and particularly wagons, is suffi- 
ciently worth while for you to aid us with practical cooperation, 
or had we best wait and be carried along by the general forward 
movement. 

68248'— 15 ^15 



226 



FARM-MACHINEBT TRADE ASSOCIATIONS. 



PREVENTION OF PRICE CUTTING AMONG DEALERS. 



227 



181 



At the annual convention of the National Association of Agricul- 
tural Implement & Vehicle Manufacturers in October, 1909, the 
following resolution was adopted: 

That we recommend to the Dealers' Federation the very great 
importance of following up and putting into effect everywhere 
the plan suggested by the general committee of the trade on the 
subject of the cost of doing business, which would automatically 
establish the proper retail price in every locality, leaving to the 
dealer a legitimate profit. 

The movement also received the indorsement of the plow and seeder 
manufacturers' associations. These associations, as well as the Na- 
tional Association of Agricultural Implement & Vehicle Manufac- 
turers, recommended that all their members and branch houses join 
the cost-educational movement and contribute to its support. 

The cost of doing business begun to be a topic of great inter- 
est to the dealers, and at the Federation meeting in October, 1908, 
it was one of the principal subjects recommended for consideration 
by constituent associations and local clubs. Furthermore, the Bulle- 
tin for December, 1908, stated that the manufacturers who, as 
representatives of the National Association of Agricultural Imple- 
ment & Vehicle Manufacturers, were attending the conventions of 
retail implement dealers' associations were bringing to the dealers' 
attention the importance of properly estimating costs. 

Some of the federated associations created cost committees. Mem- 
bers of the Iowa association were urged to furnish the cost committee 
of that association with exact statements in regard to their expenses 
of doing business. 

At the convention of the dealers' Federation in the latter part of 
1909, the special cost committee of manufacturers, jobbers, dealers, 
and trade-paper representatives reported that replies from a con- 
siderable number of dealers showed the minimum percentage of the 
cost of doing a retail business to be 14 per cent and the maximum 
22 per cent. 

This report also suggested the establishment of a permanent 
organization to dispense accounting information to the dealers, and 
that this work be assumed by the Federation with promises of 
financial aid from the manufacturers and jobbers. The matter was 
thoroughly discussed, and a special committee of the Federation, 
to which the matter had been referred, made a report. The Imple- 
ment Dealers' Bulletin in referring to this report stated that the 
committee — 

deemed it inexpedient to take up the work of organizing and 
maintaining at this time a bureau of cost education and ac- 
counting; that such a course was unadvisable inasmuch as the 
Federation was lacking of the necessary funds and that such 
a bureau would not be self supporting. It was also reported 



that it was the belief of the committee that the work should 
be carried on by the manufacturers and jobbers with such 
assistance from the Federation and State associations as they 
were in a position to give, the grounds taken for this being 
that only a small percentage of dealers are members of asso- 
ciations, and as the benefits of cost education would be for non- 
. members as well as members, it would not be doing justice to 
the active members to bear the burden of educating those who 
care nothing for association work and its attendant results. 

The report met with the unanimous approval of the Federa- 
tion. There was no dissenting voice to the proposition that 
cost accounting is of vital interest to the retail dealer and it was 
decided that it should be made the leading subject for discus- 
sion at conventions of all constituent associations and that 
jobbers be asked to close their places of business during the 
session of the convention when this subject was on the program 
so that all may attend and hear and take part in the discussion. 
It was also arranged that another conference be held in Kansas 
City during the convention of the Western association. 

The following resolutions on the subjects of costs and local clubs 
were adopted by the Federation at this convention : 

Figuring costs, — Believing that one of the principal causes of 
failures and of the large per cent of changes in the retail imple- 
ment business is ignorance as to the cost of doing business, and 
failures and changes being very damaging to the trade as well 
as the jobbers and manufacturers, we urge every officer and mem- 
ber of constituent associations to study the subject and take it 
up with his neighbor. We also urge special consideration of 
this important topic at the coming conventions. 

Local clubs. — It is the judgment of your committee that this 
Federation and the several constituent associations do not realize 
the value of local clubs, or greater effort would be made to organ- 
ize them. Cover our territory with local clubs and 95 per cent 
of the trade evils complained of will vanish. The local club 
will do more for the retail trade than all other agencies com- 
bined. It is not opposition that retards the organization of 
local clubs; it is inertia, lassitude, laziness, and a disposition to 
look to the other fellow to do what you ought to do yourself. 
The organization of local clubs will sweep our territory like 
wildfire if the prominent, self-satisfied members will wake up 
and put their shoulder to the wheel. And it is further the judg- 
ment of your committee that the members of this Federation and 
the official members of our several associations are at fault in 
that they have not each taken more aggressive individual action 
along this line. 

Under date of December 27, 1909, a call was issued to members of 
the special cost committee of manufacturers, jobbers, dealers, and 
trade-press representatives for a meeting to be held at Kansas City 
in January, 1910, at which time the final report would be made. In 
this letter it was stated that cost education had been the most promi- 
nent topic at all conventions and annual meetings of retail imple- 



228 



fARM-MACHINEKY TBADE ASSOCIATIONS. 



PREVENTION OF PRICE CUTTING AMONG DEALERS. 



229 



I 



ment dealers during the fall and winter; that trade papers had given 
aid; and the manufacturers had also done much practical work in 
addressing meetings of dealers and by giving cooperation through 
their travelers. It was stated that the meeting had been called to con- 
sider the methods to be used in continuing the work. 

This meeting of the special cost committee at Kansas City in 
January, 1910, resulted in the organization of the Cost Educational 
Association, to carry on the cost-accounting work among the retailers. 
The secretary of the National Wagon Manufacturers' Association 
was elected president of the new association; a representative of an 
implement manufacturing company in Illinois was elected treasurer, 
and an executive committee, consisting of manufacturers, jobbers, 
dealers, and representatives of the implement trade press, was also 
elected. The selection of representatives of the traveling salesmen to 
serve on the executive committee was left to that committee. In com- 
menting upon the new organization, the Bulletin for February, 1910, 
said in part : 

It is the purpose of this association to establish permanent 
headquarters in charge of a competent secretary and to send out 
to dealers information relative to cost figuring. Experts will 
be put to work devising systems for the use of dealers in keeping 
track of their business. 

It is the greatest work ever attempted to place the implement 
business uj)on a more profitable basis, and the interest dealers 
are taking in it is manifested by the large attendance at the ses- 
sions of all of the conventions when ^t was up for discussion. 
They are ea^r for information and enlightenment upon any 
point that will tend to make their business more profitable. 

The president of the Western association in a message to members, 
published in the Bulletin for February, 1910, said in part : 

If we renew our allegiance to the association, study our busi- 
ness from a profit-getting standpoint and make a success of it, 
we will build up the personnel of our members and put our busi- 
ness on a conmiercial basis where the retail implement and 
vehicle dealer will no longer have a questionable rating and his 
business will be a satisfactory one. 

From the time of the formation of the Cost Educational Associa- 
tion, the Federation and its constituent State and interstate associa- 
tions took renewed interest in the local-club movement. Some asso- 
ciations employed county agents to organize local clubs. The Bulle- 
tin asserted that it had been the experience of local-club workers 
that care should be taken not to cover too much territory. Eeferring 
to local clubs, it was said: 

They should be just what the name implies, local organiza- 
tions, because it is local conditions with which they must cope. 
They should cover what might be tenned competitive territory. 



Sometimes territory can not be confined to county lines, but it 
should be so arranged as to take in dealers who come in close 
competition with one another. 

Letters published in the Bulletin in 1910 reported the proceedings 
at meetings of various local clubs. The report of a meeting of a local 
club in Marshall County, Iowa, contained in the Bulletin for July, 
1910, read in part as follows : 

The meeting was very informal. Every man had a right to 
talk back or ask questions, and the friendly, yet spirited way in 
which the troublesome questions were discussed was indeed re- 
freshing and gives promise of better things. 

This club has accomplished greet things. It is indeed a model 
club and it is hoped it will be as the leaven that shall leaven the 
whole State. The members have not only increased their prices, 
but reduced their expenses and are doing more business with 
less friction, thus eliminating unpleasant competition. 

Another item in this issue of the Bulletin stated that — 

The members of Local Number 30 seem to be well pleased 
with conditions this season. They have all been upon friendly 
terms, and there has been practically no price cutting on imple- 
ments. They naturallv feel that their local club has been of 
great value to them. A meeting of the club will be held before 
fall trade commences. 

In December, 1909, the special joint committee on costs sent out a 
card intended for circulation among retailers. (See p. 224.) This 
card was entitled " What does it cost you to do business? " In May, 
1910, the Cost Educational Association issued a folder entitled " Sug- 
gestions No. 2." These two circulars are shown as Exhibits 27 and 
28, respectively. Both recommended that dealers in figuring costs 
should include interest on total investment, rental on buildings owned 
and used in the business, and a salary for the services of proprietor, 
as well as for employees. The significance of this method of comput- 
ing costs is referred to elsewhere. (See p. 241.) 

At the convention of the Federation in October, 1910, the presi- 
dent referred to the Cost Educational Association as follows : 

This association should receive the support of every manu- 
facturer, jobber and retail dealer in the land, and if it can work 
out some plan by which it can show the price cutting dealer 
when he first engages in business, what he sees after he has lost 
his money and he finds himself a bankrupt, it will have done 
great good. We commend this association and bespeak for it 
your consideration, encouragement and support. 

The report at this meeting of the chairman of the committee on 
local clubs showed that the movement was growing and declared 
that none of the clubs fostered bv the constituent associations of the 
Federation attempted to maintain a schedule of prices, but that, 



230 



PARM-MACHINEBY TRADE ASSOCIATIONS. 



through the medium of these clubs, many of the evils of the trade 
had been eliminated. At this convention a conference was held 
with the executive committee of the Cost Educational Association. 
The chairman of the latter reported the progi*ess that had been made 
and appealed for even better cooperation on the part of all branches 
of the trade, not only in a financial way but by better organization 
of cost committees, local clubs, etc., for the purpose of getting mem- 
bers to do personal work. A general discussion took place, the 
delegates present pledging the support of their associations in this 
movement. The president of the Federation is reported to have 
stated that inasmuch as there were many dealers who would never 
be reached by any cost educational suggestions they should be 
weeded out and that it was incumbent upon manufacturers to care- 
fully investigate prices made by such dealers with a view to dis- 
continuing business relations with those known to persistently sell 
at prices embracing no profit whatever. 

The organized dealers regarded the plan for the organization of 
the National Implement & Vehicle Association in the latter part of 
1910 as affording the means of maintaining a cost educational de- 
partment that would mean much to the retailer in view of the pros- 
pect for a real campaign to be carried on with new dealers. The 
report of the manufacturers' committee on consolidation on this sub- 
ject read as follows : 

In this department it is not alone a question of collecting and 
furnishing data as to the best method of computing cost for 
the manufacturer, but to go one step farther and endeavor to 
supply information to our retail customers as to the best method 
of their determining the cost of doing business. 

Briefly stated, the gi'eater percentage of those already en- 
gaged and those entering the implement and vehicle business are 
men with only a limited amount of business training, yet we 
loan our capital on longer time than any bank, and without any 
security, simply on our estimate from secondhand information, 
that they will come out all right, and we find many times to 
our sorrow that failures are caused simply by the lack of knowl- 
edge of the cost of doing business in the retail trade. 

Financial failures can greatly be reduced by supplying in- 
formation to the trade which we will be able to do through a 
well equipped organization in this department. 

In January, 1911, the president of the Cost Educational Associa- 
tion discussed its work before the convention of the dealers belonging 
to the Western association in part as follows : 

The executive committee of the association has met in Chicago 
three times during the year, namely, February 10, June 16 and 
October 11. All these meetings were well attended and work 
planned, which has since been carried out as far as possible. 



• '' • 



PREVENTION OF PRICE CUTTING AMONG DEALERS. 231 

The first piece of cost literature sent out by the association 
was entitled, "Suggestions, No. 1," containing rules for the 
figuring of costs, of which approximately 100,000 were printed, 
part of them distributed gratis, and again, quantities sold to 
manufacturers and associations for distribution among their 
customers and members. This was followed later by the issu- 
ance of a folder entitled " Suggestions, No. 2," containing a re- 
vision and detailed explanation of the same rules for figuring 
costs, together with a table for readily determining the selling 
price of any article, based on a knowledge of the per cent of cost 
and profit, using as a basis the purchase price of the goods. These 
folders have been supplied to every dealers' convention held this 
year who accepted our suggestion to distribute them at the time 
of their meeting; fully 80,000 of them have been sent out in 

various ways. ^ , x i. u -^ 

Our work has necessarily been done to a large extent by corre- 
spondence, and we have by this means urged upon the various 
associations throughout the country that the subject of costs 
be made a special feature on their convention programs, which 
request met with a most enthusiastic response and in most in- 
stances the greater part of one day of the various conventions 
has been devoted to cost educational work. 

«♦♦♦*•• 

I would like to call particular attention to the fact that more 
conventions in the Middle West have been addressed by dealers 
than by manufacturers, which to me is, as it must also be^to vou, 
a most encouraging sign of the progress being made. 
During these talks the progress made in organizing permanent 
cost committees and local clubs were reported on and in every 
instance where there had been such activity withm the territory 
of any association reports as to improvement m profats and 

selling conditions were very marked. 

♦ * * * ♦ ♦ • 

There is another feature I would mention at this time, which 
is that in working out these problems of cost the manufacturers, 
jobbers and dealers have been brought closer together than 
ever before, and from this cooperative work it is not diflicu t 
to see that in time many of the other problems whicli are still 
confronting us will be brought to a satisfactory solution, 1 be- 
lieve. This work has caused all engaged in the implement and 
vehicle lines to realize that their interest is common in nearly 
all of these problems, consequently they can only hope for a 
successful solution of them by reasonably considering them to- 
gether. , ^ • • * • 

In closing this report, let me say that the progress of the 
work thus far has exceeded all expectations, for m the beginning 
it was looked upon by many as visionary and chimerical, and 
because of its educational character it was predicted that it 
would take years to show results; but we are conscious that 
while the agitation has not extended back more than three years 
and the actual work only one year, that the results not only 



m 



tABM-MAOHlNEBY TBADE ASSOCIATIONS, 



PEEVENTION OF PRICE CUTTING AMONG DEALERS. 



233 



i 



have justified every effort made and every penny spent, but it 
would positively be a calamity if the work was not carried on 
aggressively. 

One of the members of the Western association in an address to 
the members at this time referred to the cost educational movement in 
the following words: 

Now here is the proposition before us — ^these jobbers and 
manufacturers are all trying to teach us how to do business and 
tell us how to make money by raising the price in the sale of 
goods, and telling us how we shall figure out the cost of doing 
business and also telling us how we shall be honorable and honest 
among ourselves to them. 

Another member stated that there was a successful club in his dis- 
trict made up of dealers from several adjacent counties. He said 
they did not try to establish prices, but that, in his opinion, when 
the dealer was in sympathy with his competitor prices would adjust 
themselves. Another member recommended that clubs be formed 
early in the season before the trade opened up, stating that there were 
always certain dealers who start out and make the lowest prices 
early in the season and that they were the men who did the most 
harm by price cutting. 

The Cost Educational Association held a meeting at this time at 
which it was decided not to continue the association as a separate 
organization, but to divide the work between the dealers' Federation 
and the National Implement & Vehicle Association, the latter to 
originate, print, and publish a reasonable amount of cost information 
and cost literature, to be distributed by the dealers' organizations 
among their members and unorganized dealers as well. 

The Bulletin issued in March, 1911, asserted that local clubs were 
increasing. It went on to say : 

There is no movement so well calculated to benefit the retail 
business as this, and when dealers put off so important a matter 
they simply stand in their own light. There is no reason why 
competitors in any line should not meet frequently to talk over 
business conditions. We do not mean by that to agree upon a 
schedule of prices, for that is not only unlawful but entirely 
unnecessary; but there are a thousand and one questions which 
will come up, discussion of which will be of benefit to all. 

In April, 1911, the Bulletin stated : 

It is not always advisable to confine the territory [of the local 
club] to county lines, but it is better to take in the towns which 
come in closest competition with each other. 

At the Federation meeting in October, 1911, the delegates dis- 
cussed the best methods of reaching dealers who take no account 
of the cost of doing business, and, in this connection, some of the 
delegates expressed the opinion that the best way to reach them was 



\ 



M 



^ 



i 



through the manufacturers whose goods they handle. The opinion 
was freely expressed that most manufacturers had given too little 
attention to this important subject. The preponderance of opinion, 
however, was that the local club was the best medium for promoting 
cost education among the retail dealers. A committee was also ap- 
pointed to prepare a plan for pushing the local-club movement in 
the various constituent associations. The Federation's committee 
on local clubs reported that 74 local associations or clubs had been 
organized in sections covered by the federated associations, of which 
55 were in existence. In regard to accomplishments of such clubs, 
the committee reported that dealers had been brought into more 
friendly relations; their business conducted on a more profitable 
^ basis; members' rights, as to territory, respected; cost knowledge 
disseminated; better prices obtained; and matters of local interest 
taken up and acted upon. 

A representative of the manufacturers' association who was present 
pledged the support of manufacturers in the cost educational move- 
ment, and said in part: 

We will endeavor to do our part in furnishing, if you desire 
them, speakers from our ranks to cooperate with you in spread- 
ing the cost gospel, and thus by keeping everlastingly at it, not 
only at convention time, but through local clubs, special cost 
committees, and every other reasonable means we shall be able to 
make a mutually satisfactory report a year hence. 

At the annual convention of the National Implement & Vehicle 
Association held at the same time a separate department of the sales 
managers of concerns belonging to the association was organized. 
From subsequent developments, it appears that, in addition to the 
other purposes proposed for this department, its organization was 
intended as an important step in furnishing assistance to dealers in 
the cost educational campaign. The members of the National Imple- 
ment & Vehicle Association also adopted the following resolution : 

Whereas, the subject of the "cost of doing business" is one 
of the most important now before the trade, 

Therefore, he it resolved, That our members be requested to 
instruct their salesmen to take up and discuss the same with the 
retail dealers with whom they come in touch, with the view of 
improving the condition of the dealers, and thus making them 
more permanent in the trade than has been the rule heretofore. 

Furthermore, the secretary and general manager of the National 
Implement & Vehicle Association, in addressing the annual conven- 
tion of the members of the Western association in January, 1912, 
stated that he did not believe that any man who expected to remain 
in business could afford to overlook the matter of local clubs. He 
also stated his belief that the manufacturers would render personal 
and every other kind of aid to help the work along. 



234 



FAKM-MACHINEEY TRADE ASSOCIATTONS. 



PREVENTION OP PRICE CTTTTING AMONG DEALERS. 



235 









A representative of the National Implement & Vehicle Association, 
in addressing the convention of the Minnesota implement dealers' 
association at this time, emphasized the great benefit of local clubs to 
dealers. In this connection, he said in part: 

I know, of course, many of these have been formed and then 
broken up, for the reason that you all would not stand by your 
agreements in regard to prices. But for the time being you 
should forget such grievances and work together to save the 
retail trade for yourselves. Then after working together for a 
time you can become such friends that jrou may bring up the 
price question again later on, but the point I want to impress 
upon your minds is " get together." Everyone put your shoulder 
to the wheel and you wiU win. 

The manufacturers will help you in this also, and in fact in 
every way that will bring you in a closer relationship with us. 

Another representative of the National Implement & Vehicle Asso- 
ciation, in addressing this convention, said in part: 

It is the stay-at-home dealers who do the mischief, they are 
the ones who cut prices and demoralize the business. To reach 
them form your local clubs. Get in all the dealers in the near-by 
towns. Neither they nor you are half as bad as the other thinks 
he is, and you will find this out when you come to know each 
other better. Talk over this cost question with them, provide 
printed matter on the subject, and eventually you will get them 
into the association, and the implement business in your section 
will show better results. 

A representative of the manufacturers, in advising the Minnesota 
dealers how to reach dealers who would not join the State associa- 
tion, advised the formation of local clubs. At a banquet held at the 
time of this convention, attended by membei-s of the Minnesota 
dealers' association and the jobbers belonging to the jobbers' club 
of Minneapolis and St. Paul, a prominent dealer from South 
Dakota, in an address on the subject of the benefits of cost account- 
ing, spoke in part as follows : 

This association is not complete, and will not be complete, 
until it reaches every dealer in the State, and this certainly can 
only be done through local organizations or local clubs. If 
your competitor is doing business at a loss, probably he does 
not' know it; but, nevertheliess, he is forcing you to sell your 
goods without a profit. If you should tell him that he is doing 
business at a loss he would probably laugh at you. Under these 
circumstances it may take some pluck and it may interfere 
somewhat with your ideas of dignity to ask your competitor to 
meet with you and talk over matters pertaining to your busi- 
ness, but your dignity will suffer far more in a bankrupt's court. 
I believe that you will be forced to do it sooner or later, as a 
matter of self-preservation, as the sooner you do it the better. 



% 



* 






> 



There will be but very little price cutting when you and your 
competitors all know what it costs to do business, and how little 
net profit you are actually making. 

* 4i * « # * 41 

The manufacturer and jobber owe to the retail dealer the 
right to select territory large enough to safeguard him from 
price-cutting competitor, and they also owe to the retail trade 
m general the duty of cutting out all dealers who are known to 
be price cutters. The tendency of manufacturers and jobbers 
is to increase the number of agencies and decrease the size of the 
dealer's territory. The mutual interests of such manufacturers, 
jobbers and retailers demand the reverse of this policy, which 
would help to decrease the cost of doing business for the retailer. 

> During the early part of 1912 the Bulletin reported the spread of 
the local-club movement, especially in the territory of the Western 
association, and stated that the subject of the costs of doing business 
was being very generally discussed. The secretary of the Federa- 
tion in a general letter to secretaries of the constituent associations 
in March, 1912, said : 

I want to urge upon you the great importance of the local club 
work and to acEnonish you to push it with vigor. It is receiving 
an impetus in many places and the results are remarkable. 
Manufacturers and jobbers are greatly interested and if you 
request it will instruct their travellers to talk local clubs every- 
where they go. 

Finally, in July, 1912, the Bulletin reported that a plan was being 
worked out by the sales managers' department of the National Im- 
plement & Vehicle Association to push the cost educational move- 
ment more vigorously than it had ever been done before. The 
details of this plan were announced to the Federation delegates and 
to members of the National Implement & Vehicle Association at 
annual meetings of each of these organizations in October, 1912. 
The committee on terms and credits reported the following resolution 
of the Sales Managers' Department: 

" That, the association shall, through a committee, propose to 
the National Federation of Retail Implement and Vehicle Deal- 
ers' Associations, which will hold its annual convention at 
Chicago in October, in furthering the work of cost education 
through the formation of local clubs of dealers, that if the 
Federation and its constituent associations will undertake to 
form such local clubs, that for every club organized under the 
constitution and by-laws provided by the Federation, consisting 
of not less than ten implement dealers, this association will 
undertake to provide for such expense to the extent of $25 for 
each club so organized. The maximum number of clubs per 
State, in this initial undertaking, is to be limited to ten, and 
this proposition is understood to apply to the territory covered 
by the fifteen organizations now included in the Federation. 



^1* 



236 



FABM-MACHINERY TBADE ASSOCIATIONS. 



PREVENTION OF PRICE CUTTING AMONG DEALERS. 



237 



II 



" The financial assistance suggested above is not to be provided 
ont of the funds of our association, but is to be raised by solici- 
tation among the members of the association. Furthermore, 
that in carrying out this plan, it is understood that the sales 
managers' department of this association will undertake, in co- 
operation with the various State dealers' associations, to assist 
them in the formation of said clubs, by providing the personal 
assistance of some of their members to accompany the officers 
of said dealers' associations when the formation of a club is con- 
templated and assistance is desired/' 

Continuing, the report of the committee on terms and credits read 

as follows: 

You will see by the above resolution that our association is to 
undertake to help bear the expense of the organization of local 
clubs in fifteen of the retail dealers' associations, to the extent 
of ten in each association, if called on to do so. They also have 
offered to provide the personal assistance of some of our members 
to accompany the officers of said dealers' associations to help in 
the formation of these clubs contemplated, if this help is desired. 

This proposition was presented to the Federation on Oct. 9, 
at the annual meeting in Chicago, and the Federation accepted 
same, and, as was expressed by one of the delegates, " This was 
the most valuable aid that manufacturers have ever offered to 
the retail dealer, not alone considering it from the standpoint 
of the money we were going to contribute but the personal 
assistance we offered in this work "—because they felt that along 
with our contributions is bound to come our personal efforts in 
other directions. 

Your committee feels that this is one of the most advanced 
steps ever taken by this, or any other association, to better the 
business condition of its customers, and will do more to do away 
with misunderstandings that arise from time to time between 
the manufacturer and the dealer, than any other one thing. To 
carry on this work contemplated it will not alone require the 
raising of the funds that we have agreed to furnish, but it will 
entail a considerable amount of extra work on the part of our 
secretary and general manager, and this committee wants to rec- 
ommend that our convention goes on record approidng of this 
plan and authorizing the establishment of a department in our 
organization especially equipped to help further this work of the 
formation of local dubs, and that it be done right away. 

The chairman of the committee explained this plan of the sales 
managers' department to carry the cost educational movement to 
dealers who could not be reached in any other way. He is reported 
to have declared that, with the assistance of the National Implement 
& Vehicle Association, the retail implement dealers' organizations, 
through the formation of local clubs, would extend until within five 
years fully 75 per cent of all the retail implement dealers in the 
United States would be in touch with modem business methods. 



« 



At this convention the members of the association adopted a reso- 
lution which read as follows: 

Whereas, we believe the most economical and satisfactory way 
to place our. goods in the hands of the consumer is through the 
retail dealers, and as so much depends upon his welfare, we 
favor any movement that tends to better conditions existing in 
the retail trade ; therefore 

Be it resolved^ That we approve the action of the executive 
committee in its effort to assist the officers of the retail associa- 
tions in the establishment of local clubs, and that we favor the 
opening of a department in our organization especially equipped 
to take up this work, and also urge the hearty cooperation of all 
of our members from sales managers to traveling salesmen to the 
end that the desired improvement may be attained at once. 

As indicated in the report of the committee quoted above, the 
proposition of the manufacturers was accepted by the Federation. 
It was reported that in the discussion unanimous opposition was 
shown to local clubs making any effort to regulate prices, as it was 
thought that " this was not only unlawful, but had proved impracti- 
cable, having caused the dissolution of every club that had under- 
taken it." The Federation delegates adopted the following resolution : 

Exact knowledge of selling cost is vital to success, and there is 
no other place where cost accounting can be learned so well as 
in the local club. But no club and no dealers' association has 
ever been successful in fixing prices. Never try it. Be honest 
with each other and with yourselves. Learn to know exactly 
what it costs you to do business, and the retail prices will take 
care of themselves. 

A committee was appointed to work out the details of the plan 
proposed by the sales managers, and it was decided that each club to 
be formed thereunder should be required to adopt the constitution 
and by-laws recommended by the National Federation. (See Exhibit 
25.) These articles of association provide as follows: 

No article or by-laws shall be adopted which will conflict with 
the regulations of the constituent association under which this 
club is organized, nor with those of the National Federation of 
Retail Implement and Vehicle Dealers' Associations, of which 
it is a member. 

Furthermore, the articles of association recommended by the 
Federation for adoption by the constituent State and interstate asso- 
ciations provide: 

Section 1. No rules, regulations or by-laws shall be adopted 
in anjr manner stifling competition, limiting production, re- 
straining trade, regulating prices, or pooling profits. 

Section 2. No coercive measures of any kind shall be prac- 
ticed or adopted toward any retailer, either to induce him to 
join the association, or to buy or to refrain from buying of any 
particular manufacturer or wholesaler. Nor shall any discrimi- 



i 



288 



FABM-MACHINERY TRADE ASSOCIATIONS. 



natory practices on the part of this association be used or al- 
lowed against any retailer for the reason that he ma v not be a 
member of the association, or to induce or persuade him to be- 
come such member. i • j r n u 
Section 3. No promises or agreements of ahy kmd shall be 
requisite to membership in this association, nor shall any penal- 
ties be imposed upon its members for any cause whatsoever. 

In referring to this plan of cooperation between the National 
Federation and the National Implement & Vehicle Association in 
extending the local-club movement, the secretary of the Western 
association in his annual report to the members of that association 
in January, 1913, made a statement which was in part as follows : 

Among the very important things accomplished the past 
year is securing the cooperation of the manufacturers in the 
local club movement. Their willingness to assist shows that 
they are interested in the retail dealer and that they look upon 
him as a part of their business organization. That well-organ- 
ized local clubs can be made to revolutionize the implement 
business has been demonstrated in many localities, and manu- 
facturers have come to believe that it is worth while to render 
assistance in advancing this work, and surely dealers should 
show their interest. The proposition which was presented by 
the sales managers' committee of the National Implement and 
Vehicle Association to the National Federation and approved 
by that body after a full and free discussion contemplates both 
personal and financial assistance. I regard the benefit to be 
derived from this offer of assistance to be twofold. It brings 
the sales manager in closer touch with the retail trade : not only 
will they assist in organizing local clubs and drop a few hints 
about cost accounting, etc., but they will come into closer con- 
tact with the irregularities of the business. When they and 
their representatives go into the local club meetings they will 
learn what the element of unrest is that is causing so much 
trouble and, if only for their own protection, will seek a remedy. 
I want to go upon record as characterizing this movement 
as the greatest ever undertaken to bring about better condi- 
tions. The manufacturers have gone into it with enthusiasm. 
They see in it wonderful possibilities if only dealers will do 
their part, and I beg of you to do it. With further reference 
to this I can not do better than quote from my report to the 
Federation : " There is no need of our taking this advance step 
in association work in a lukewarm sort of way. We are going 
to have to show that we mean business if we expect the coop- 
eration of the manufacturers, for it is going to cost them a large 
sum of money and they expect results." 
At this meeting the secretary and general manager of the National 
Implement & Vehicle Association also addressed the members of the 
Western association on this subject. He spoke in part as follows; 
I believe the Western association was the originator of the 
local-club idea. Anyway, it is simply a little closer organiza- 
tion— a getting together of your neighbors, a getting together 
with the man down the street who sells at a less price than you; 



* 1 • 



II 



PREVENTION OF PRICE CUTTING AMONG DEALERS. 



239 



ijH 



it is simply getting together with him and figuring on the cost 
of doing business. 

The question is. How can the dealer make a fair profit? 
Other things are minor. To start in and talk of selling prices 
is absolutely illegal and absolutely unnecessary, but you can fix 
in your mind and in the mind of your competitor that an article 
that cost $40 can not be sold for $39. The trouble is we do not 
know where that $40 line is, and the local club is the solution. 

This thing has been bearing upon the minds of the manufac- 
turers for a long time. Don't you think that they are unaware 
of the catalog house competition and other kinds of competi- 
tion; don't you believe that they are simply trying to get all 
the price they can out of you. They have found that through 
y. economic waste the retail dealer throughout the country is fail- 
ing at the rate of 25 to 33 J per cent every year. Now, that 
means to them that new dealers are coming in to take their 
place, and results in a disarranging of business. It is the inde- 
pendent competitor that you have the least to fear from. Now 
to assure you of the sympathy and cooperation of the manufac- 
turers, they will pay $25 toward the establishment of each local 
club, and as a starter will allow you that for each local club of 
ten in each association territory, that is clubs that approximate 
ten persons to the club. 

Now just think if you take advantage of that offer and organ- 
ize that many clubs over this whole territory what a help it will 
be to you ! This is a business proposition. The manufacturers 
are putting in their money to assure you of the cooperation of 
the National Implement and Vehicle Association, which repre- 
sents the manufacturers. They have planned to set apart a 
department in that association, with competent help in charge, 
to act with the State secretary. 

At the annual meeting of the National Federation in October, 
1913, the secretary reported that abundant evidence had been fur- 
nished of the wisdom of the plan of the manufacturers' association 
to advance the local-club movement. Forty local clubs had been 
organized during the year under the special offer of the manufac- 
turers.^ One-half of this number of clubs had been (organized in 
the territory covered by the Western and Minnesota associations. 
Eight clubs had been formed in Iowa, four in Wisconsin, three in 
Illinois, two each in Michigan and the Omaha jobbing territory, and 
one in Colorado. Furthermore, the secretary asserted that the deal- 
ers were on the right track in encouraging local organization; that 
it was the only way in which mercantile knowledge could be brought 
to the attention of a certain class of dealers. 

At a conference between the delegates to the annual meeting of 
the Federation and a committee of the National Implement & 
Vehicle Association in October, 1913, one of the dealers asserted 
that one of the important problems of the local clubs was to main- 
tain interest on the part of their members. He stated that sugges- 

1 In this connection, see Exhibit 30. 



240 



FABM-MACHINEBY TEADE ASSOCIATIONS, 



/ 



PREVENTION OP PRICE CUTTING AMONG DEALERS. 



241 



tions had been made for the employment of a local-club organizer 
or a superintendent. One of the manufacturers replied that if the 
dealers did not take sufficient interest in their clubs to keep them 
going, there was no way in which they could be maintained. He 
stated that the manufacturers were showing increased interest in 
the local-club movement and that the National Implement & Ve- 
hicle Association was prepared to renew its offer of financial assist- 
ance in the organization of local clubs and was making plans to 
extend the local-club movement. 

In October, 1914, the executive committee of the National Imple- 
ment & Vehicle Association reported that during the preceding year 
the association had contributed over $1,200 to the cast-educational 
work among the dealers and recommended that the work should be 
continued during the ensuing year. As shown elsewhere (see p. 53), 
the furnishing of information to the retail trade on the subject of cost 
accounting is one of the functions contemplated for a department or 
bureau of the National Implement & Vehicle Association, a plan which 
was referred to with approval by the president and the committee on 
manufacturing costs at the annual convention in October, 1914. 

The secretary of the Federation of dealers' associations in his 
report to the delegates present at the annual meeting of that organi- 
zation in October, 1914, stated that the sentiment in favor of local 
organization among the dealers was growing, that the work done by 
many of the local clubs was having its influence, and that the assist- 
ance rendered by the manufacturers had given the work an impetus. 
He stated that the chief reason why more clubs had not been organ- 
ized was because of lack of funds. He asserted that the most effective 
way to organize was to place an organizer in thf> field, but that few 
of the associations had the money for that purpose. The secretary 
of the National Implement & Vehicle AssociatioL promised the con- 
tinued financial assistance of the manufacturers' association in the 
extension of local clubs. 

At this meeting, the Federation delegates, after discussing the 
Stevens bill pending in Congress to permit manufacturers of trade- 
marked goods to determine resale prices at which their products 
were- sold, decided that the n.«iasure would be of no benefit to the 
implement trade, and they tabled a motion to approve the bill.^ At 
this meeting they subsequently adopted a resolution asserting the 
belief that — 

No man is considered a good dealer who does not know the 
cost of doing business. The place to learn this is the local 
club. * * * we urge upon our several official boards the 
supreme importance of pushmg the local club movement during 
the coming winter far more strenuously tha n ever before. 

iln January. 1915, however, the Western association went on record In faTor ot tb* 
BteTens bUl. (See p. 208.) 




Section 6. Significance of cost suggestions as a basis for retail prices. 

The ostensible purpose of the campaign for cost education is to 
prevent inexperienced and unbusinesslike dealers from selling at 
prices that do not include full allowance for all elements of expense. 
As already indicated, however, the "cost suggestions" of the Cost 
Educational Association recommend the inclusion of allowances for 
interest on the investment, rent of buildings owned and used in the 
business, and a salary for the proprietor. Some of these items are 
not properly a part of the dealer's cost. Indeed, the cost of a ma- 
chine computed on the basis recommended is practically equivalent 
to a fair selling price. This fact strongly supports the view that the 
^cost-educational movement has been adopted as a discreet method of 
determining prices, and tends to produce results hardly distinguish- 
able from those produced by a price agreement among competing 
retailers. This fact also explains why so much attention has been 
given by the organized manufacturers, as well as by dealers, to the 
formation of local clubs as a means of securing the adoption of this 
cost-finding method by all dealers competing with each other in their 
respective localities. 

The public concern in this method of determining retail prices is 
the same as in the method of computing wholesale prices recom- 
mended by the National Implement & Vehicle Association for adop- 
tion by manufacturers, for it is easy to see that when dealers discuss 
the relation of costs and prices there must often be a strong tempta- 
tion to have some sort of an understanding regarding selling prices. 
That there is a tendency to attempt such understandings by members 
of local clubs is admitted. In this connection, one of the manufac- 
turers belonging to the National Implement & Vehicle Association 
who has been most active in the local-club and cost-educational move- 
ment, in an address at a meeting of the Tri- State Vehicle & Imple- 
ment Dealers' Association in the latter part of 1912, is quoted in part 
as follows: 

From the experience I gained last winter in assisting in or- 
ganizing some local county clubs in my own State of Wisconsin, 
there is one thing I wish to warn you about, and that is the 
tendency to establish a uniform retail price on the main goods in 
your line. 

Now, first of all, this is illegal, impracticable and absolutely 
unnecessary. Every man should make his own prices, based on 
his costs and expense of doing business (which is a part of the 
costs), and then add whatever profit he wishes to make, and let 
his competitor work along the same line. There are many other 
very important and valuable things that can be done by coop- 
erative work in these clubs, which will justify their existence 
and be of value to the dealer living in the counties, and who have 

68248-— 15 ^16 



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p 



240 



FABM-MACHINEKY TRADE ASSOCIATIONS. 



/ 



tions had been made for the employment of a local-club organizer 
or a superintendent. One of the manufacturers replied that if the 
dealers did not take suflScient interest in their clubs to keep them i^ ^# 

going, there was no way in which they could be maintained. He 
stated that the manufacturers were showing increased interest in 
the local-dub movement and that the National Implement & Ve- 
hicle Association was prepared to renew its offer of financial assist- 
ance in the organization of local clubs and was making plans to 
extend the local-club movement % 

In October, 1914, the executive committee of the National Imple- 
ment & Vehicle Association reported that during the preceding year 
the association had contributed over $1,200 to the cost-educational 
work among the dealers and recommended that the work should be 
continued during the ensuing year. As shown elsewhere (see p. 53), 
the furnishing of information to the retail trade on the subject of cost % 
accounting is one of the functions contemplated for a department or 
bureau of the National Implement & Vehicle Association, a plan which 
was referred to with approval by the president and the committee on 
manufacturing costs at the annual convention in October, 1914. 

The secretary of the Federation of dealers' associations in his 
report to the delegates present at the annual meeting of that organi- i» | # 
zation in October, 1914, stated that the sentiment in favor of local 
organization among the dealers was growing, that the work done by 
many of the local clubs was having its influence, and that the assist- 
ance rendered by the manufacturers had given the work an impetus. 
He stated that the chief reason why more clubs had not been organ- 
ized was because of lack of funds. He asserted that the most effective \ 
way to organize was to place an organizer in the field, but that few 
of the associations had the money for that purpose. The secretary 
of the National Implement & Vehicle AssociatioL promised the con- 
tinued financial assistance of the manufacturers' association in the 
extension of local clubs. 

At this meeting, the Federation delegates, after discussing the ^ I # 

Stevens bill pending in Congress to permit manufacturers of trade- 
marked goods to determine resale prices at which their products 
were sold, decided that the measure would be of no benefit to the 
implement trade, and they tabled a motion to approve the bill.^ At 
this meeting they subsequently adopted a resolution asserting the 
belief that— g^ 

No man is considered a good dealer who does not know the 
cost of doing business. The place to learn this is the local 
club. ♦ ♦ * we urge upon our several oflficial boards the 
supreme importance of pushmg the local club movement during 
the coming winter far more strenuously than ever before. 



1 In January. 1915, however, the Western association went on record In faTor of tb« 
Stevens bUl. (See p. 208.) 



PBEVENTION OF PBICE CUTTING AMONG DEALERS. 



241 



Section 6. Sig^ficance of cost suggestions as a basis for retail prices. 

The ostensible purpose of the campaign for cost education is to 
prevent inexperienced and unbusinesslike dealers from selling at 
prices that do not include full allowance for all elements of expense. 
As already indicated, however, the "cost suggestions" of the Cost 
Educational Association recommend the inclusion of allowances for 
interest on the investment, rent of buildings owned and used in the 
business, and a salary for the proprietor. Some of these items are 
not properly a part of the dealer's cost. Indeed, the cost of a ma- 
chine computed on the basis recommended is practically equivalent 
to a fair selling price. This fact strongly supports the view that the 
*^ cost-educational movement has been adopted as a discreet method of 
determining prices, and tends to produce results hardly distinguish- 
able from those produced by a price agreement among competing 
retailers. This fact also explains why so much attention has been 
given by the organized manufacturers, as well as by dealers, to the 
formation of local clubs as a means of securing the adoption of this 
cost-finding method by all dealers competing with each other in their 
respective localities. 

The public concern in this method of determining retail prices is 
the same as in the method of computing wholesale prices recom- 
mended by the National Implement & Vehicle Association for adop- 
tion by manufacturers, for it is easy to see that when dealers discuss 
the relation of costs and prices there must often be a strong tempta- 
tion to have some sort of an understanding regarding selling prices. 
That there is a tendency to attempt such understandings by members 
of local clubs is admitted. In this connection, one of the manufac- 
turers belonging to the National Implement & Vehicle Association 
who has been most active in the local-club and cost-educational move- 
ment, in an address at a meeting of the Tri- State Vehicle & Imple- 
ment Dealers' Association in the latter part of 1912, is quoted in part 
as follows: 

From the experience I gained last winter in assisting in or- 
ganizing some local county clubs in my own State of Wisconsin, 
there is one thing I wish to warn you about, and that is the 
tendency to establish a uniform retail price on the main goods in 
your line. 

Now, first of all, this is illegal, impracticable and absolutely 
unnecessary. Every man should make his own prices, based on 
his costs and expense of doing business (which is a part of the 
costs), and then add whatever profit he wishes to make, and let 
his competitor work along the same line. There are many other 
very important and valuable things that can be done by coop- 
erative work in these clubs, which will justify their existence 
and be of value to the dealer living in the counties, and who have 



68248*— 15- 



-16 



II 



242 FARM-MACHINERY TRADE ASSOCIATIONS. 

a membership in them. Some of the things that thev can take up 

that I might suggest at this time, would be first, the agreement 

to get settlement for all goods on delivery, either by cash or note, 

the value of which is over ten dollars. 

In February, 1913, the same manufacturer, who was then chairman 

of the executive committee of the National Implement & Vehicle 

Association, in writing to the secretary of that association, made the 

following statement on the subject of price discussions at meetings of 

local clubs: 

The writer has noticed this tendency of the dealers to talk 
about price agreements at all the meetings we have been to and 
we have made it a point to show them that it is impossible and 
also impracticable. 
Apparently to guard against the danger of violating the antitrust 
laws which may arise because of this tendency, the National Imple- 
ment & Vehicle Association has made it obligatory that all local clubs 
of dealers that are formed under its offer of financial assistance shall 
adopt the constitution and by-laws for such clubs prepared by the 
National Federation. In this connection, the chairman of the execu- 
tive committee of the National Implement & Vehicle Association just 
mentioned, in writing to the secretary of that association in Novem- 
ber, 1912, said in part: 

As intimated to you the other day in the office, I am rather 
inclined to believe you will find that the Michigan Association 
has had some very unfavorable experience in starting local clubs, 
and we presume the reason can be very easily traced to the fact 
that they are using the old method of conducting these meetings. 
In connection with this letter, I was going to ask if you had 
a copy of the Federation's constitution and by-laws. I think 
you should have some of these printed right away if Mr. Hodge 
[the secretary of the Federation] is unable to furnish you with a 

I do not know but what I would make some little changes in 
minor things in the copy which you will readily see when you 
look it over. I think it's very unportant that we msert that all 
clubs, to which we are to furnish foiancial or personal help, must 
be organized under the constitution and by-laws, as provided 
for the Federation. This will be our protection in case the Gov- 
ernment should see fit to investigate any of these clubs. 
The organized manufacturers take the position that prices shall 
not be discussed at local-club meetings, except in relation to the cost 
of doing business, and that no agreements or understandings should 
in any way be entered into. They claim that agreements or under- 
standings are superfluous; that aU that is necessary is by the study 
of costs to create in the dealer a realizing sense of the fact that there 
is a dead line below which goods can not be sold except at a loss. 
They allege that the study of costs is the most effective way of pre- 
venting price cutting. The reason for this exists in the fact that 



PREVENTION OF PRICE CUTTING AMONG DEALERS. 



243 



the computation of costs on the plan recommended furnishes a figure 
at which the dealer can sell at a profit. In view of this situation, the 
formal articles of association of the local clubs are probably suffi- 
cient to afford some guaranty against price agreements in cases 
where dealers recognize the possibilities of profit in the cost sug- 
gestions originally prepared by the Cost Educational Association, 
especially when, through the maintenance of local clubs, every dealer 
in any locality can be induced to adopt these suggestions in fixing 
his prices. It should be pointed out, however, that this does not 
mean the establishment of uniform retail prices so long as each 
dealer bases his prices upon his own costs. On the other hand, atten- 
>tion should be called to the fact that it is impossible to determine 
whether the dealers do actually base their prices upon their own costs 
or whether prices are based on the cost of other dealers, which may 
be disclosed to competitors in the interchange of information at 
meetings of the local club. 

It appears that there has been no direct effort to establish a definite 
percentage of selling price as a standard rate of soiling cost for adop- 
tion by all dealers. From time to time implement trade papers have 
published average percentages compiled from the reports of a con- 
siderable number of individual dealers, and in a general letter sent to 
local clubs on May 15, 1914, the secretary of the National Implement 
& Vehicle Association said that 20 clubs had reported their average 
costs of doing business at figures ranging from 14 per ceut to 20 per 
cent. The average was 16.9 per cent. The secretary added: 

No dealer, however, should accept this average for finding the 
selling prices of his lines, but study his own costs and use the 
figures thus derived. The Local Club which knows its average 
cost of doing business is progressing. Has Your Club Got That 
Far? 

The apparent implication of this suggestion is to call the attention 
of the dealer to the advantage of using the average cost of his local 
club in fixing his prices. 

While the cost-educational movement has various aspects, the im- 
portant fact to be considered is that the method of fixing prices 
through cooperative study of costs is not merely susceptible of abuse 
in particular cases, but directly militates against independent action 
on the part of competitors. 



I 



I 



EXHIBITS. 



ExiiiniT 1. 



CONSTITUTION AND BY-LAWS OF THE NATIONAL IMPLEMENT 

AND VEHICLE ASSOCIATION. 

Constitution. 

article i. 

This association shall be known as the National Implement and 
Vehicle Association of the United States of America. 

ARTICLE n. 

The object of this association shall be to take suitable and timely 
notice of, and action upon, matters of legislation, national and state ; 
matters concerning freight and transportation, matters of educa- 
tional interest pertaining to trade and agriculture, and all those 
matters attention to which, and action upon which, will protect or 
promote the interests of its members, and to foster and promote the 
interests of American agriculture and agriculturists. 



ARTICLE III. 

Section 1.* Active members of this association shall consist of 
two classes : 

Members of Class I shall be persons, firms and incorporated com- 
panies engaged in the manufacture and sale of agricultural imple- 
ments, vehicles and lines allied thereto at wholesale. 

Members of Class II shall be persons, firms, incorporated com- 
panies, branch houses or general agencies, not manufacturers, en- 
gaged in the jobbing, wholesaling or distribution of agricultural 
implements, vehicles or lines allied thereto. 

Members of this class shall be entitled to all privileges of mem- 
bers of Class I, except that they may not vote at elections or hold 
office. 

Section 2. Associate members of this association shall be persons 
or firms engaged in the manufacture and sale of merchandise, ma- 
terials or accessories used or sold by the active members but who 
are not in competition with them. 

Section 3. The association may, by vote, admit to honorary mem- 
bership an)^ person who, from eminence, shall seem entitled to such 

^ Sec. 1 as amended and adopted at the annual convention, Oct. 19, 1911. 

245 



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IIM 



i 



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consideration, and such honorary membership shall confer all the 
rights and privileges of active members during life unless with- 
drawn for cause. But no more than two persons shall be admitted 
in any one year. 

ARTICLE IV. 

Section 1. The officers of the association shall be a president and 
twelve vice-presidents, an executive committee of twelve, a treasurer, 
a secretary and general manager and a chairman of the executive 
committee, all to be elected by the ballot of the association, except 
the secretary and general manager and chairman of the executive 
committee. The president, vice-presidents and treasurer shall be 
elected for a term of one year, "rtie members of the executive com- 
mittee shall be elected for a term of three years. Four members of 
the committee shall be elected each year for three years. The time 
of service of all officers to commence with the closing of the annual 
meeting at which they are chosen. The secretary apd general 
manager shall be appointed by the executive committee. 

Section 2. A nominating committee of five shall be selected by the 
association to present nam3s to be voted for to fill the offices of presi- 
dent, vice-presidents, treasurer and members of the executive com- 
mittee. 

Section 3. The president shall be a member of the executive com- 
mittee. 

Section 4. The members of the executive committee shall elect* 
their chairman from among their members and also have power to 
fill any vacancy which shall be occasioned by the death or resigna- 
tion 01 any member of that committee or any other cause. 

ASnCLB ▼• 

The constitution mav be altered or amended as follows: The de- 
sired change must be first submitted to the executive committee for 
its consideration, and if said executive committee recommend the 
adoption of the change, a copy of such change must then be mailed 
by the secretary to each member of the association at least thirty days 
in advance of the annual meeting, and at least two-thirds of the 
members present at such meeting must vote in favor of such change 
before it shall become a part of the constitution. 

By-Laws. 

article I. — OFPICEHS OP THE ASSOCIATION. 

Section 1. The officers of the association shall be a president and 
twelve vice-presidents, a board of twelve directors, which shall bo 
designated as an executive committee ; a treasurer, a secretary and 
general manager, and a chairman of the executive committee. 

Sec. 2. The president shall be ex-officio member of the executive 
committee. 

ARTICLE n. — duties OP OFFICERS. 

Section 1. The president shall preside at all meetings of the asso- 
ciatioiL 



«t 



ii. 



Sec. 2. The president shall sign all papers which are necessary for 
the association to sign under seal attested by the secretary. 

Sec. 3. In the absence or inability of the president to act, a vice- 
president, following the order of election, shall preside. 

Sec. 4. The chairman of the executive committee shall preside at 
all meetings of the executive committee; he shall have power to call 
the committee together and shall be the chief executive officer of the 
association for the year. 

Sec. 5. The secretary and general manager shall perform all duties 
common to that office, and shall have supervision of all work of the 
association, and shall also be an ex-officio member ot all committees. 
He shall have custody of all books, records, also the corporate seal, 
or other property of the association. He shall have power to engage 
and discharge all help employed in the conduct of the work, and shall 
^x their compensation subject to the approval of the executive com- 
mittee. In all matters requiring immediate action he, with the presi- 
dent and chairman of the executive committee, shall constitute an 
advisory committee, to determine the course to be taken. 

Sec. 6. The treasurer shall have charge of all funds of the associa- 
tion, and shall pay them out on vouchers made by the secretary and 
general manager, and shall make a report on the condition of funds at 
each annual meeting or when called upon by the executive com- 
mittee. The treasurer shall give bond in the amount fixed by the 
executive committee, the expense of obtaining which shall be paid 
by the association. 

Sec. 7. It shall be the duty of the executive committee to see that 
the objects of the association are carried out to the best of their 
ability. They shall have entire control of and give attention to 
internal affairs of the association, and shall appoint the secretary 
and general manager and fix his compensation, also committees to 
carry out the various objects of the association, and shall be at 
liberty to place on such committees members of the association not 
members of the executive committee, and shall designate the place 
for the annual meeting unless othei:wise directed by the votes of 
the association. They may admit new members and report the names 
of such members at the next meeting of the association, and they 
shall have the accounts of the treasurer audited at least once in each 
They shall also deal with all resignations and withdrawals 



-• year. 



and report results at the next general meeting of the association. 

ARTICLE ni. — selection OF OFFICERS. 

Section 1. The president, vice-presidents, treasurer and chairman 
of the executive committee shall be elected at the annual meeting of 
the association by the members thereof for a period of one year, and 
the members of the executive committee shall be elected as follows: 
There shall be elected at the first meeting of the association twelve 
members, four for a period of one year, four for a period of two 
years and four for a period of three years, and at each annual elec- 
tion after the first election in 1912 there shall be elected four direc- 
tors for a period of three years each. 

Sec. 2. The chairman of the executive committee shall hold his 
office for a period of one year and until his successor is elected and 
qualified. Should the office of chairman of this committee become 



I' I' 



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FAEM-MACHINEBY TBADE ASSOCIATIONS. 



EXHIBITS. 



249 



N 



I 



vacant for any reason, the members of the executive committee shall 
have power to elect one of their number as chairman to serve until 
the next annual meeting of the association. 

Sec. 3. The secretary and general manager shall be appointed by 
the executive committee. 

Sec. 4. If a vacancy occurs in the executive committee or in the 
office of treasurer, the same may be filled by the executive committee 
until the next general election. 

Sec. 5. At the annual meeting of the association a nominating 
committee of five shall be selected by the association to present names 
to be voted for to fill the offices of president, vice-presidents, treas- 
urer and members of the executive committee. 

ABTICLE IV. — MEETINGS. 

Section 1. The annual meeting of the association shall be held on 
the fourth Tuesday in October each year, unless the executive com- 
mittee, for good cause, shall be compelled to change the date. 

Sec. 2. All general meetings of the association shall be held at 
such places as shall be designated at a general meeting of the asso- 
ciation, but if no place is selected for the holding of such meeting, or 
it becomes impracticable to hold such meeting at the place designated, 
then such general meeting shall be held at such time and place as the 
executive committee may designate. 

Sec. 3. Special meetings of the association shall be called by; the 
president at the request of the executive conmiittee or at the written 
i-equest of twenty-five members of the association, such call to be in 
writing and to state the object of such meeting, and a copy of the 
same to be mailed to each member at least ten days prior to the date of 
such meeting. 

Sec. 4. At all general meetings of the association, any number of 
members present shall constitute a quorum for the transaction of 
business. At any special meeting of the association at least twenty- 
five members shall constitute a quorum for the transaction of business. 

Sec. 5. Meetings of the executive committee may be held upon 
call of the chairman of the executive committee, upon the secretary 
giving three days' notice to the members of such committee, stating 
the object for which said meeting is called. 

Sec, 6. A majority of the members of the executive committee 
shall constitute a quorum for the transaction of business. 

article v. — ^members. 

Section 1. The membership of the association shall be divided 
into three classes, viz. : active members, associate members, and hon- 
orary members. 

Sec. 2. Active members of this association shall consist of two 
(«^aosvo . 

Members of Oass I shall be persons, firms, and incorporated com- 
panies engaged in the manufacture and sale of agricultural imple- 
ments, vehicles, and lines allied thereto at wholesale. 

Members of Class II shall be persons, firms, incorporated com- 
panies, branch houses or general agencies, not manufacturers, en- 
gaged in the jobbing, wholesaling, or distribution of agricultural 



t 



implements, vehicles, or lines allied thereto. Members of this class 
shall be entitled to all privileges of members of Class I, except that 
they may not vote at elections or hold office. 

Sec 3. Associate members of this association shall be persons or 
firms engaged in the manufacture and sale of merchandise, materials, 
or accessories used or sold by the active members but who are not in 
competition with them. 

Sec 4. The association may, by vote, admit to honorary member- 
ship any person, who, from eminence, shall seem entitled to such 
consideration, and such honorary membership shall confer all the 
rights and privileges of active members during life unless withdrawn 
for cause. But no more than two persons shall be admitted in any 
one year. 

Sec 5. New members of the association may be admitted at any 
time by the executive committee in such manner and form as the 
executive committee shall prescribe. All resignations or withdraw- 
als from membership will be subject to the action of the executive 
committee. 

ARTICLE VI. DUES. 

Section 1-A. Active Members of Class I. Each incorporated com- 
pany having a paid-in capital stock and surplus not exceeding 
$50,000, each individual manufacturer and each incorporated firm 
engaged in manufacturing agricultural implements, vehicles and 
lines allied thereto, shall, upon becoming a member, pay to the asso- 
ciation annual dues amounting to $25; those having a capital and 
surplus of more than 

$50,000 and less than $100,000 shall pay $50 
100,000 and less than 200,000 shall pay 75 



200,000 and less than 
300,000 and less than 
400,000 and less than 
500,000 and less than 
600,000 and less than 
700,000 and less than 
800,000 and less than 



300,000 shall pay 100 
400,000 shall pay 150 
500,000 shall pay 200 
600,000 shall pay 250 
700,000 shall pay 300 
800,000 shall pay 350 
900,000 shall pay 400 



li 



900,000 and less than 1,000,000 shall pav 450 
1,000,000 and less than 5,000,000 shall pay 500 
6,000,000 or over shall pay 750 

In computing dues under the foregoing schedule consideration will 
be given as to the amount of capital and surplus employed in the 
manufacturing of agricultural implements, vehicles and lines allied 
thereto, and in event of more than one-half of the capital and surplus 
being employed in the manufacture and sale of lines foreign to im- 
plements, vehicles or allied lines and going to a different class of 
trade, the dues shall be computed on one-half of their capital stock 
and surplus. 

Sec 1-B. Active Members of Class II, consisting of persons, firms, 
incorporated companies, branch houses or general agencies (not 
manufacturers) engaged in jobbing, wholesaling or distribution of 
agricultural implements, vehicles or allied lines, shall, upon becoming 
a member, pay to the association annual dues of $50.00. 

Sec 2. Annual dues shall be payable in advance, one-half upon 
the first day of January and one-half on the first day of July of each 



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FAKM-MACHINEEY TRADE ASSOCIATIONS. 



EXHIBITS. 



251 



A I 



year. Each active member who shall join the association at any time 
subsequent to the first day of January in any year shall pay to the 
association the amount of dues as provided in section one of this 
article pro rata for the unexpired time, but not less than twenty-five 
dollars. 

Sec. 3. The executive committee shall have the power to make from 
time to time such special assessments against the members of this 
association in addition to the annual dues as may be necessary to meet 
the contingent expenses of the association. Such assessments shall 
be made pro rata on the same basis as fixed for dues ; provided, that 
the total amount so assessed by the executive committee in any one 
year shall not exceed one-half the amount of the annual dues paid by 
the members, except when directed to do so by two-thirds of the 
members present at any meeting of the association. 

Sec. 4. Associate Members will be entitled to all social privileges 
of the association and to attend all general meetings of the associa- 
tion, except those of an executive character. This membership does 
not carry with it the privilege of voting. A nominal fee of $16.00 
annually, payable January 1, will be charged associate members. 

Sec. 5. The dues provided for in the foregoing sections of this 
Article shall be for tne year, and no person, firm or corporation shall 
be permitted to withdraw so long as any dues or obligations to the 
association remain outstanding. 

ARTICLE Vn. — CORFOBATE SEAL. 

Section 1. The corporate seal of this association shall have en- 
graved thereon National Implement and Vehicle Association, 
tJ. S. A., and in the center the word " Seal." It shall be kept by the 
secretary of the association, and shall be affixed to all papers or 
documents that may be required to be executed under the corporate 
seal of the association. 

ARTICLE Vin. — delinquent MEMBERS. 

Section 1. A list of members delinquent in the payment of dues 
or assessments will be presented by the secretary to the executive 
committee from time to time for such action as the executive com- 
mittee may wish to take. 

ARTICLE IX, 

Section 1. All resolutions to be presented to the annual meeting 
of the association must first be submitted to the committee on resolu- 
tions. 

ARTICLE X. 

Section 1. "Eobert's Kules of Order" shall govern all such pro- 
ceedings. 

ARTICLE XI. 

Section 1. The By-Laws may be amended at any meeting of the 
association by a majority vote, thirty days' notice having been given 
the members of the association of such proposed amendment, to- 
gether with a copy of the proposed amendment. 

Sept. S, WIS. 



vl # 



Exhibit 2. 

CONSTITUTION AND BY-LAWS OP THE WAGON DEPARTMENT OP 
THE NATIONAL IMPLEMENT & VEHICLE ASSOCIATION. 

Constitution. 

ARTICLE 1. 

This organization shall be known as the Wagon Department of 
the National Implement and Vehicle Association. 

ARTICLE 2. 

■^ The object of this Department shall be the promotion of the in- 
terests of the wagon manufacturers. 

ARTICLE 3. 

The members of this Department shall be persons, firms and cor- 
porations engaged in the manufacture of wagons, also members of the 
National Implement and Vehicle Association. Each firm or cor- 
poration shall be entitled to one vote only. 

* ARTICLE 4. 

Section 1. The officers of this Department shall be a president, 
vice president, secretary-treasurer, all of whom shall be elected at the 
annual meeting to serve one year, and shall perform the duties usually 
assigned to such officers. 

Section 2. There shall be an executive committee of five, com- 
posed of the president, vice president, secretary-treasurer, and two 
others, who shall be elected at each annual meeting to serve for a 
period of one year. Said executive committee shall elect its chairman 
from among its own members. 

Section 3. The members of the executive committee shall have 
power to fill any vacancy which may be occasioned by the death or 
resignation of any member of that committee. 

ARTICLE 6. 

This constitution may be altered or amended at any annual meet- 
ing by an affirmative vote of two-thirds of the members present at 
such meeting. 

By-Laws. 

ARTICLE 1. 

The president shall preside at the meetings of the Department ; in 
his absence the vice president shall preside. 

ARTICLE 2. 

Section 1. It shall be the duty of the executive committee to see 
that the objects of the Department are carried out to the best of its 



MuJd 



FAKM-MACHINERY TRADE ASSOCIATIONS. 



/" 



EXHIBITS. 



253 



M 



t '■ 



ability. It shall have entire control of and give attention to in- 
ternal affairs of the Department, and shall appoint committees to 
carry out the various objects of the Department, and shall be at 
liberty to place on such committees, members of the Department 
who are not members of the executive committee, and shall designate 
the place for meetings of the Department, unless otherwise directed 
by the Department at large. u * 

Section 2. The executive committee may admit new members to 
the Department and report the names of such members at the next 
meeting of the Department. 

ABTICLE 3. 

Section 1. The regular annual meeting of the Department shall 
be held on the third Wednesday of November in each year in Chicago 
unless the executive committee, for good cause, should be compelled 

to change the date. .,^ ^ ^t^ni. ii;i 

Section 2. Special meetings of the Department shall be called 
at the request of the executive committee, or a majority thereof, or 
at the written request of ten members of the Department, and such 
calls shall be in writing and shall state the object of the meeting, 
and a copy of same shall be mailed to each member at least ten days 
prior to the date of such meeting. 

ABTICLE 4. 

Section 1. Each member shall, upon the first day of May of each 
year, pay to the Department, as annual dues, $1. 

Section 2. The executive committee shall have the power to make 
from tune to time, such special assessments against the active mem- 
bers of the Department, in addition to annual dues, as may be neces- 
sary to meet the contingent expenses of the Department, provided such 
assessments shall not exceed $5 in any one year; no other assess- 
ments shall be levied except when the committee are so directed to by 
two-thirds of the members present at any meeting of the Department. 

ARTICLE 5. 

Section 1. The secretary-treasurer shall have charge of all funds 
of the Department and shall pay them out on vouchers approved by 
the chairman of the executive committee or on order of the executive 
committee, and shall make a report of the condition of the funds in 
his hands at each annual meeting of the Department, and whenever 
called upon to do so by the executive committee. , , . , 

Section 2. The secretary-treasurer shall have a record of the pro- 
ceedings of all meetings of the Department and of the executive 
committee, and of all other matters concerning the Department, and 
he shall issue notifications of all meetings to each member of the 
Department and shall be allowed all necessary expenses approved by 
the executive committee. 

•ARTICLE 6. 

The Secretary-treasurer shall mention in his annual report the 
names of such members as shall allow their dues or assessments to 



remain unpaid for one year, and all such names shall be dropped 
from the roll of membership. 

ARTICLE 7. 

Robert's Rules of Order shall govern the meetings of this Depart- 
ment. 

ARTICLE 8. 

These by-laws may be amended at any annual meeting by a ma- 
jority of the members present, provided five days' notice shall be 
given in advance of said meeting by the secretary-treasurer to all 
members of the association, advising them of the amendments to the 
by-laws proposed to be made. 



Exhibit 3. 

CONSTITUTION AND BY-LAWS OF THE SALES MANAGERS* DE- 
PARTMENT OF THE NATIONAL IMPLEMENT & VEHICLE ASSO- 
CIATION. 

(Adopted February 1, 1912 ; amended March 18, 1914.) 

Constitution. 

article i. 

This organization shall be known as the Sales Managers' Depart- 
ment of the National Implement and Vehicle Association. 

ARTICLE n. 

The object of this Department shall be the promotion of the inter- 
ests of its members and the improvement of conditions. 

ARTICLE in. 

The members of this Department shall be persons or concerns who 
are active members of the Association. The representation of the 
members at the meetings of the Department shall be persons (not 
traveling men or house salesmen) having charge of the selling of the 
product or merchandise handled by the members. Each member or 
house shall be entitled to one vote only. 

ARTICLE IV. 

Sec 1. The Officers of this Department shall be a President, Vice- 
President, Secretary Treasurer, all of whom shall be elected at the 
Annual Meeting to serve one year, or until their successors are elected 
and qualify, and shall perform the duties usually assigned to such 
officers. 

Sec 2. There shall be an Executive Committee of seven, composed 
of the President, Vice-President, Secretary-Treasurer and four others, 
who shall be elected at each Annual Meeting to serve for a period of 
one year. The President of the Department shall be ex-officio chair- 
man of the Executive Committee. 






FARM-MAOHINEBY TBADE ASSOCIATIONS. 



; 



ARTICLE V. 

This Constitution may be altered or amended at any meeting by 
an affirmative vote of two-thirds of the members present at such meet- 
ing, due notice in writing having been given each member by the 
Secretary-Treasurer thirty dayb in advance of such meeting of 
changes proposed. 

By-Laws. 

ABnCLB I. 

The President shall preside at the meetings of the Department; in 
his absence, the Vice-President shall preside. 

ARTICLE n. 

Sec. 1. It shall be the duty of the Executive Committee to see that 
the objects of the Department are carried out to the best of its ability. 
It shall have entire control and give attention to the internal affairs 
of the Department, and shall appoint committees to carry out the 
various objects of the Department, and shall be at liberty to place on 
such committees members of the Department who are not members 
of the Executive Committee, and shall designate the place for meet- 
ings of the Department unless otherwise directed by the Department 
at large; also, shall have power to fill official vacancies. 

Sec. 2. The Executive Committee may admit new members to the 
Department and report the names of such members at the next meet- 
ing of the Department 

ABTICLB in. 

Sec. 1. Kegular annual meeting of the Department shall be held 
on the second Wednesday of October at such place as may be chosen 
by the Executive Committee. ^ , ^ 

Sec. 2. There shall be four regular meetmgs of the Department, 
to be held on the third Wednesdays of January, March, June and 
November of each year. 

Sec. 3. Special meetings of the Department shall be called at the 
request of the Executive Committee, or upon the regular request of 
ten members of the Department, and such calls shall be in writing, 
and shall state the object of the meeting, and copy of same shall be 
mailed to each member at least ten days prior to date of such meeting. 

Sec. 4. Any annual or regular meeting of the Department may be 
changed as to time or place of meeting for good cause, by the Exec- 
utive - Committee. 

ARTICLE IV. 

Sec. 1. The annual dues of the Department shall be $5.00, payable 
May 1st of each year. New members as accepted shall pay at the 
rate of $1.00 for each of the regular meetings scheduled to the follow- 
ing May 1st dues, payable in advance. 

Sec. 2. The Executive Committee shall have the power to make, 
from time to time, such special assessments against the active mem- 
bers of the Department, in addition to Annual Dues, as may be neces- 
sary to meet the contingent expenses of the Department, provided 
such assessment shall not exceed $5.00 in any one year; no other 



EXHIBITS. 



255 



assessment shall be levied except when the Committee is so directed 
by two-thirds of the members present at any meeting of the Depart- 
ment. 

ARTICLE V. 

Sec. 1. The Secretary-Treasurer shall have charge of all funds of 
the Department, and shall pay them on vouchers approved by the 
Chairman of the Executive Committee, or on order of the Executive 
Committee, and shall make a report of the condition of the funds in 
his hands at each Annual Meeting of the Department and whenever 
called upon to do so by the Executive Committee. 

Sec. 2. The Secretary-Treasurer shall keep a record of the proceed- 
ings of all meetings of the Department and of the Executive Com- 
mittee, and of all matters concerning the Department, and he shall 
issue notifications of all meetings to each member of the Department, 
and shall be allowed all necessary expenses approved by the Exec- 
utive Committee. 

ARTICLE VI. 

The Secretary-Treasurer shall mention, in his annual report, the 
names of such members as shall allow their dues or assessments to 
remain unpaid for one year, and all such names shall be dropped 
from the roll of membership. 

ARTICLE vn. 

Robert's Rules of Order shall govern all meetings of this Depart- 
ment. 

ARTICLE vin. 

These By-Laws may be amended at any meeting by a majority of 
the members present provided thirty days notice shall be given in 
advance of said meeting by the Secretary-Treasurer to all members 
of the Department, advising them of the amendments of the By-Laws 
proposed to be made. 

Exhibit 4. 

LIST OF OFFICERS AND COMMITTEES OF THE NATIONAL IMPLE- 
MENT & VEHICLE ASSOCIATION, AS OF AUGITST 20, 1914. 

PRESIDENT. 

J. A. Craig, Janesville Machine Co., Janesville, Wis. 

VICE PEESIDENT8. 



W. B. Taylor, Niles & Scott Co., La 

Porte, Ind. 
Wm. F. Hoyt, Dowagiac Drill Co., 

Dowagiac, Mich. 
Wm. Louden, Louden Machinery Co., 

Fairfield, la. 

B. P. ThornhlU, Thornhill Wagon Co., 
Lynchburg, Va. 

U. H. Brown, Brown Mfg. Co., Zanes- 
viUe. Ohio. 

C. A. Pattison, Peoria Drill & Seeder 
Co., Peoria, IlL 



R. F. Roberts, Randolph Wagon Works, 

Randolph, Wis. 
F. H. Delker, Delker Bros. Buggy Co., 

Henderson, Ky. 
A. T. Stevens, John Deere Plow Co., 

St. Louis, Mo. 
Francis Farquhar, A. B. Farquhar Co. 

(Ltd.), York, Pa. 
F. La Bare, Owatonna Mfg. Co., Owa- 

tonna, Minn. 
F. N. Taflf, Duane H. Nash, Inc., Mil- 

lington, N. J. 



\ 



I 



256 



FABM-MACHINBEY TBADE ASSOCIATIONS. 

glCBBTAKT AND OENEBAL MANAGKB. 

E. W. McCuUough, Cbicago, 111. 

TBKASUBKB. 

H. N. Wade. V. S. Wind Engine & Pump Co., Batavla, HI. 

EXBCUTIVE COMMITTEB. 



S. B. Swayne, chairman, Robinson & 

Co., Richmond, Ind. 
A. J. Brosseau, Gale Mfg. CJo., Albion, 

Mich 
Joseph Dam. Deere & ^;,,^''"wArta 
H. M. WalUs. J. I. Case Plow Works, 

Racine Wis. 
C S. Brantingham, Emerson-Brantlng- 

ham Co., Rockford, 111. 
F. E. Myers, F. E. Myers & Bro., Ash- 
land, Ohio. 



G. A. Ranney, International Harvester 

Co., Chicago, 111. 
Panl E. Herschel, R. Herschel Mfg. 

Co., Peoria, 111. ^ ^ , 

Geo. R. James, James & Graham 

Wagon Co., Memphis, Teun. 
C S. Funk, M. Rumely Co., Chicago, 111. 
W. H. Stackhouse, French & Hecht, 

Springfield, Ohio. 
A. B. McLean, Roderick Lean Mfg. Co., 

Mansfield, Ohio. 



STANDING COMMITTEES. 

Advisoru committee {former presidents). 



H. M. Kinney, chairman, Winona 

Wagon Co., Whiona, Minn. 
Wm. Butterworth, Deere & Co., Moline, 

IlL 

F. C. Johnson, American Seeding Ma- 
chine Co., Springfield, Ohio. 

E. D. Metcalt International Harvester 
Co., Auburn, N. Y. 

Newell Sanders, Newell Sanders Plow 
Co., Chattanooga. Tenn. 



C. F. Huhleln, B. F. Avery & SoM, 
Louisville, Ky. . „ * w 

F. E. Myers, F. E. Myers & Bro., Ash- 
land, Ohio. 

W. S. Thomas. The Thomas Mfg. Co., 
Springfield, Ohio. 

Jas. A. Carr, American Seeding Ma- 
chine Co.. Springfield. Ohio. 






Agricultural extension. 



G. A. Ranney, chairman. International 
Harvester Co., Chicago, 111. 

Jas. A. Carr, vice chairman, American 
Seeding Machine Co., Richmond, Ind. 

L. N. Burns, J. I. Case Plow Works, 
Racine. Wis. 



P. G. Holden, International Harvester 

Co.. Chicago, 111. 
W. E. Taylor, Deere & Co., Moline, 111. 



Attorneys and litigation. 



C. S. Brantingham, chairman, Emer- 
son-Bra ntingham Co.. Rockford, 111. 

Wm. , Butterworth, vice chairman, 
Deere & Co., Molhae, 111. 



A. Hirshheimer, La Crosse Plow Co., 

La Crosse, Wis. 
Newell Sanders, Newell Sanders Plow 

Co., Chattanooga, Tenn. 



Credits and collections. 



M. R. D. Owings, chairman, M. Rumely 

Co., Chicago, 111. 
W. M. Onton, vice chairman, Jonn 

Deere Plow Co., Moline, 111. 
F. H. Farnsworth, Janesvllle Machine 

Co., Janesvllle, Wis. 
C. A. Bines, Roderick Lean Mfg. U>m 

Mansfield, Ohio. 



B. C. Mosher, Sandwich Mfg. Co., 
Sandwich, 111. ^ ^ 

J. K. Scoggan, B. F. Avery & Sons. 
Louisville, Ky. 

C. H. Si)eck, R. Herschel Mfg. Co., 

Peoria. 111. 



^ f 



«l 



^ 



i 



EXHIBITS. 



Dealers* ossociationB. 



257 



W. S. Thomas, chairman, The Thomas 

Mfg. Co., Springfield, Ohio. 
A. J. Brosseau, vice chairman. Gale 

Mfg. Co., Albion, Mich. 
Wm. Black, B. F. Avery & Sons, Louis- 
ville, Ky. 
F. W. Burg, L. Burg Carriage Co., 

Dallas City, 111. 
L. N. Burns, J. I. Case Plow Works, 

Racine, Wis. 
W. C. Collins, Keystone Steel & Wire 

Co., Peoria, 111. 
J. A. Craig, Janesvllle Machine Co., 

Janesvllle, Wis. 



W. I. Grove, Mllbum Wagon Co., To- 
ledo, Ohio. 

J. H. Imus, Ohio Rake Co., Dayton, 
Ohio. 

H. M. Kinney, Winona Wagon Co., 
Winona, Minn. 

R. B. Lourie, John Deere Plow Co., 
Moline, 111. 

C. D. Velie, Deere & Webber Co., Min- 
neapolis, Minn. 

J. D. White, Emersou-Brantingham 
Co., Rockford, IlL 



Foreign commerce and tariff. 



P. E. Herschel, chairman,. R. Herschel 

Mfg. Co., Peoria, 111. 
H. C. Roberts, vice chairman, Avery 

c\t% Ppoi*i*i Til 
M. M.' Baker, Holt Mfg. Co., Peoria, 111. 
B. C. Douglas, W. & B. Douglas, Mid- 

dletown. Conn. 
Francis Farquhar, A. B. Farquhar Co. 

(Ltd.), York, Pa. 
R. W. Geauque, Flint & Walling Mfg. 

Co., Kendallville, Ind. 



Juan Homs, Emerson-Brantingham Co., 
Rockford, 111. 

F. C. Johnson, American Seeding Ma- 
chine Co., Springfield, Ohio. 

Frank Silloway, Deere & Co., Moline, 
111. 

A. O. Silver, Silver Mfg. Co., Salem, 
Ohio. 

W. A. Weed, Oliver ChiUed Plow 
Works, South Bend, Ind. 



Freight transportation. 



W. J. Evans, chairman, National Imp. 

k Veh. Assn., Chicago. 
O. F. Becker, R. Herschel Mfg. Co., 

Peoria. 111. 
A. F. Bowman, J. I. Case Threshing 

Mach. Co., Racine, Wis. 
C. T. Bradford, International Har- 
vester Co., Chicago, 111. 
P. A. Coapman, The Whitman & 

Barnes Mfg. Co., Chicago, 111. 
A. R. Ebi, Deere & Co., Moline. 111. 
R. D. Fentress, La Crosse Plow Co., 

La Crosse, Wis. 
R. E. Gephart, A. B. Farquhar Co. 

(Ltd.), York, Pa. 
J. Kanter, Avery Co., Peoria, III. 
H. W. Klemme, Jos. W. Moon Buggy 

Co.. St. Louis. Mo. 



L. R. Martin, Oliver Chilled Plow 

Works, South Bend, Ind. 
J. H. Miller, Emerson-Brantingham 

Co., Rockford, 111. 

F. S. Pool, Deere & Webber Co., Minne- 
apolis, Minn. 

E. G. Schaeffer, Keystone Steel & Wire 
Co., Peoria, 111. 

G. M. Sherman, Studebaker Corp., 
South Bend, Ind. 

N. Stevenson, B. F. Avery k Sons, 

Louisville, Ky. 
W. W. Tallant, M. Rumely Co., La 

Porte, Ind. 
E. L. Wratten, Mitchell-Lewis Motor 

Co., Racine, Wis. 



Insurance. 



A. B. Mclean, chairman, Roderick 
Lean Mfg. Co., Mansfield. Ohio. 

H. N. Wade, vice chairman, U. S. Wind 
Engine & Pump Co., Batavia, 111. 

J. S. Baker, Baker Mfg. Co., Evans- 
viUe, Wis. 

68248*— 15 VI 



Wm. Butterworth, Deere & Co., Mo- 
line, 111. 

E. C. Merwin, The Russell & Co., Mas- 
sillon, Ohio. 

H. W. Suydam, Milburu Wagon Co., 
Toledo, Ohio. 



Ill 



256 FABM-MACHINEBY TRADE ASSOCIATIONS. 

8ECBETABT AND GENERAL MANAOEB. 

B. W. McCuUougli, C5hlcago, DL 

TBEASTJBBB. 

H. N. Wade, U. S. Wind Engine & Pump Co., Batavia. IlL 

EXECUTIVE COMMITTEE. 



a E. Swayne, chairman, Robinson & 
Co., Richmond, Ind. 

A. J. Brosseau, Gale Mfg. Co., Albion, 
Mich. 

Joseph Dain, Deere & Co., Moline, 111. 

H. M. Wallis, J. I. Case Plow Works, 
Racine, Wis. 

C. S. Brantingham, Emerson-Branting- 
ham Co., Rockford, 111. 

F. E. Myers, F. E. Myers & Bro., Ash- 
land, Ohio. 



G. A. Banney, International Harvester 

Co., Chicago, 111. 
Paul E. Herschel, R. Herschel Mfg. 

Co., Peoria, 111. 
Geo. R. James, James & Graham 

Wagon Co., Memphis, Teun. 
C. S. Funk, M. Rumely Co., Chicago, 111. 
W. H. Stackhouse, French & Hecht, 

Springfield. Ohio. 
A. B. McLean, Roderick Lean Mfg. Co., 

Mansfield, Ohio. 



STANDING COMMITTEES. 

Advisory committee (former presidents). 



H. M. Kinney, chairman, Winona 

Wagon Co., Winona, Minn. 
Wm. Butterworth, Deere & Co., Moline, 

lU. 

F. C. Johnson, American Seeding Ma- 
chine Co., Springfield, Ohio. 

E. D. Metcalf, International Harvester 
Co., Auburn, N. Y. 

Newell Sanders, Newell Sanders Plow 
Co., Chattanooga, Tenn. 



C. F. Huhleln, B. F. Avery & Sons. 
Louisville, Ky. 

F. E. Myers, F. E Myers & Bro., Ash- 
land, Ohio. 

W. S. Thomas, The Thomas Mfg. Co., 
Springfield. Ohio. 

Jas. A. Carr, American Seeding Ma- 
chine Co., Springfield, Ohio. 



Agricultural eaetension. 



G. A. Ranney, chairman. International 
Harvester Co., Chicago, 111. 

Jaa A. Carr, vice chairman, American 
Seeding Machine Co., Richmond. Ind. 

li. N. Bums. J. I. Case Plow Works, 
Racine, Wis. 



P. G. Holden, International Harvester 

Co., Chicago, 111. 
W. E Taylor, Deere & Co., Moline, 111. 



Attorneys and litigation. 



C. S. Brantingham, chairman, Emer- 
son-Bra ntingham Co., Rockford, 111. 

Wm. Butterworth, vice chairman, 
Deere & Co., Moline, 111. 



A. Hirshheimer. La Crosse Plow Co., 

La Crosse, Wis. 
Newell Sanders, Newell Sanders Plow 

Co., Chattanooga, Tenn. 



Credits and collections. 



M. R. D. Owings, chairman, M. Rumely 

Co., Chicago, 111. 
W. M. Onton, vice chairman, John 

Deere Plow Co., Moline, 111. 
F. H. Famsworth, Janesville Machine 

Co., Janesville, Wis. 
O. A. Hines. Roderick Lean Mfg. Co., 

Mansfield, Ohio, 



E. C. Mosher, Sandwich Mfg. Co., 

Sandwich. 111. 
J. K. Scoggan, B. F. Avery & Sons, 

Louisville, Ky. 
C. H. Speck, R. Herschel Mfg. Co., 

Peoria, IlL 



/^ 



# 






m 



4Jk 



'if 



EXHIBITS. 



Dealers* associations. 



257 



W. S. Thomas, chairman. The Thomas 

Mfg. Co., Springfield, Ohio. 
A. J. Brosseau, vice chairman, Gale 

Mfg. Co., Albion, Mich. 
Wm. Black, B. F. Avery & Sons, Louis- 
ville, Ky. 
F. W. Burg, L. Burg Carriage Co., 

Dallas City, III. 
L. N. Burns, J. I. Case Plow Works, 

Racine, Wis. 
W. C. Collins, Keystone Steel & Wire 

Co., Peoria, 111. 
J. A. Craig, Janesville Machine Co., 

Janesville, Wis. 



W. I. Grove, Mllbum Wagon Co., To- 
ledo, Ohio. 

J. H. Imus, Ohio Rake Co., Dayton, 
Ohio. 

H. M. Kinney, Winona Wagon Co., 
Winona, Minn. 

R. B. Lourie, John Deere Plow Co., 
Moline, 111. 

C. D. Velie, Deere & Webber Co., Min- 
neapolis, Minn. 

J. D. White, Emerson-Brantlnifham 
Co., Rockford, IlL 



Foreign comm^erce and tariff. 



P. E. Herschel, chairman,. R. Herschel 

Mfg. Co., Peoria, 111. 
H. C. Roberts, vice chairman, Avery 

CjO Peoria 111. 
M. M.' Baker, Holt Mfg. Co., Peoria, 111. 
B. C. Douglas, W. & B. Douglas, Mid- 

dletown, Conn. 
B'rancis Farquhar, A. B. Farquhar Co. 

(Ltd.), York, Pa. 
R. W. Geauque, Flint & Walling Mfg. 

Co., Kendallville, Ind. 



Juan Horns, Emerson-Brantlngham Co., 
Rockford, 111. 

F. C. Johnson, American Seeding Ma- 
chine Co., Springfield, Ohio. 

Frank Silloway, Deere & Co., Moline, 
111. 

A. O. Silver, Sliver Mfg. Co., Salem, 
Ohio. 

W. A. Weed, Oliver ChUled Plew 
Works, South Bend, Ind. 



Freight transportation. 



W. J. Evans, chairman. National Imp. 

& Veh. Assn., Chicago. 
O. F. Becker, R. Herschel Mfg. Co., 

Peoria 111. 
A. F. Bowman, J. I. Case Threshing 

Mach. Co., Racine, Wis. 
C. T. Bradford, International Har- 
vester Co., Chicago, 111. 
F. A. Coapman, The Whitman & 

Barnes Mfg. Co., Chicago, 111. 
A. R. Ebi, Deere & Co., Moline, 111. 
R. D. Fentress, La Crosse Plow Co., 

La Crosse, Wis. 
R. E. Gephart, A. B. Farquhar Co. 

(Ltd.), York, Pa. 
J. Kanter, Avery Co., Peoria, 111. 
H. W. Klemme, Jos. W. Moon Buggy 

Co., St. Louis, Mo. 



L. R. Martin, Oliver Chilled Plow 

Works, South Bend, Ind. 
J. H. Miller, Emerson-Brantingham 

Co., Rockford, 111. 

F. S. Pool, Deere & Webber Co., Minne- 
apolis, Minn. 

E. G. Schaeffer, Keystone Steel & Wire 
Co., Peoria, 111. 

G. M. Sherman, Studebaker CJorp., 
South Bend, Ind. 

N. Stevenson, B. F. Avery k Sons, 

Louisville, Ky. 
W. W. Tallant, M. Rumely Co., La 

Porte, Ind. 
E. L. Wratten, Mitchell-Lewis Motor 

Co., Racine, Wis. 



Insurance. 



A. B. Mclean, chairman, Roderick 
Lean Mfg. Co., Mansfield, Ohio. 

H. N. Wade, vice chairman, U. S. Wind 
Engine & Pump Co., Batavia, IlL 

J. S. Baker, Baker Mfg. Co., Evans- 
Yille, Wis. 

68248°— 15 ^17 



Wm. Butterworth, Deere & Co., Mo- 
line, 111. 

E. C. Merwin, The Russell & Co., Mas- 
sillon, Ohio. 

H. W. Suydam, Milburn Wagon Co., 
Toledo, Ohio. 



11! 



258 



FARM-MACHINERY TRADE ASSOCIATIONB. 



Manufacturing costs. 



Geo. B. James, cliairman, James & 
Graham Wagon Co., Memphla Tenn. 

Q. W. Grampton, vice cbairman, Deere 
ft Mansur Co., Moline, 111. 

W. D. BrintoD, Intematioiial Har- 
vester Go., Chicago, HI. 



C. A. Geiger, Troy Wagon Works Co., 

Troy, Ohio. 
A. B. Thlelens, Studebaker Corp., 

South Bend, Ind. 



Memhershif, 



W, U. Myers, chairman, F. B. Myers ft 

Bro., Ashland, Ohio. 
0. A. Pattlson, vice chairman, Peoria 

Drill ft Seeder Co., Peoria, 111. 
B. S. Bach, A. Buch's Sons Co., Ellza- 

hethtown. Pa. 
W. O. Collins, Keystone Steel ft Wire 

Go., Peoria, 111. 



P. B. Herschel, B. Herschel Mffe. Co, 

Peoria, 111. 
W. R. Lumry, Associated Mfrs. Co., 

Waterloo, Iowa. 
F. J. Vea, Stoughton Wagon Go., 

Stoughton, Wis. 



Ifational legislation. 



W. H. Stackhonse, chairman, French 

ft Hecht, Springfield, Ohio. 
Jas. A. Carr, vice chairman, American 

Seeding Machine Co., Richmond, Ind. 
Wdl Bntterworth, Deere ft Co., Moline, 

in. 

B. P. Gnrtis, Richardson Mfg. Co., 
Worcester, Mass. 



O. S. Funk, M. Rumely Co., Chicago, 111. 
C. F. Huhlein, B. F Avery ft Sons, 

Louisville, Ky. 
G. A. Ranney, International Harvester 

Co., Chicago, 111. 
Daniel Seltzer, Ohio Cultivator Co., 

Bellevue, Ohio. 



Paienit. 



Joseph Daln, chairman, Deere ft Co., 
Moline, HI. 

C. E. Lord, vice chairman. Interna- 
tional Harvester Co., Chicago, 111. 

01 W. Dickinson, La Crosse Plow Co., 
Lb Crosse, Wi& 



P. A. Myers, F. B. Myers ft Bro., Ash- 
land, Ohio. 

B. B. Sawyer, Cushman Motor Works, 
Lincoln, Nebr. 



State legislation. 



A. J. Brosseau, chairman, Gale Mfg. 
Co., Albion, Mich. 

H. C. Stahl, vice chairman, Ohio Culti- 
vator Co., Bellevue, Ohio. 

J. H. Anderson, Anderson Co., St. 
Paul, Minn. 

F. J. Arend, De Laval Separator Co., 
New York, N. Y. 

P. N. Curtis, Richardson Mfg. Co., 

Worcester, Mass. 
C. J. Fulton, Louden Machinery Co., 

Fairfield, Iowa. 
H. J. Hlrshhelmer, La Crosse Plow 

Works, La Crosse, Wis. 

G. F. Messinger, Messinger Mfg. Co., 
Tatamy, Pa. 



W. M. Miller, Miller Wagon Co., 

Edina, Mo. 
Jas. E. Rankin, Henderson Wagon 

Works, Henderson, Ky. 

E. B. Sawyer, Cushman Motor Works, 
Lincoln, Nebr. 

T. M. Sechler, Sechler Implement ft 

Carriage Co., Moline, 111. 
W. C. Smith, Vermont Farm Machine 

Co., Bellows Falls, Vt 

F. N, Taflf, Duane H. Nash (Inc.), 
Millington, N. J. 

W. E. Taylor, NUes ft Scott Co., La 
Porte, Ind. 



Workmen*s accident compensation. 



G. L. ATery, chairman, Avery Co., 
Peoria, 111. 

W. H. Stackhonse, vice chairman, 
French & Hecht, Springfield, Ohio. 

J. E. Brown, Aultman & Taylor Ma- 
chinery Co., Mansfield, Ohio. 



Jas. A. Carr, American Seeding Ma- 
chine Co., Richmond, Ind. 
G. W. Mixter, Deere ft Co., Moline, lU. 



EXHIBITS. 



Exhibit 6. 



259 



LIST OF MEMBEBS OF THE NATIONAL IMPLEMENT & VEHICLE 
ASSOCIATION, AS OF AUGUST 20, 1914. 

ACTIVE MEMBERS OF CLASS 1. 



Abingdon Wagon Co., Abingdon, 111. 

Acme Wagon Co., Emigsville, Pa. 

American Potato Machinery Co., Ham- 
mond, lud. 

American Seeding Machine Co., Spring- 
field, Ohio. 

Anderson Co., St. Paul, Minn. 

Ann Arbor Machine Co., Ann Arbor, 
Mich. 

Appleton Mfg. Co., Batavia, 111. 

Aspinwall Mfg. Co., Jackson, Mich. 

Associated Manufacturers' Co., Water-, 
loo, Iowa. 

Auburn Wagon Co., The, Martinsburg, 
W. Va. 

Aultman & Taylor Machinery Co., The, 
Mansfield, Ohio. 

Avery Co., Peoria, 111. 

Avery ft Sons, B. F., Louisville, Ky. 

Bailor Plow Mfg. Co., Atchison, Kans. 

Bain Wagon Co., Kenosha, Wis. 

Baker Co., The A. D., Swanton, Ohio. 

Baker Mfg. Co., Evansvllle, Wis. 

Bateman Mfg. Co., Grenloch, N. J. 

Bauer Bros. Co., The, Springfield, Ohio. 

Blount Plow Works, Evansvllle, Ind. 

Bowsher Co., The N. P., South Bend, 

Ind. 

Brown Mfg. Co., The, Zanesvilie, Ohio. 

Buch's Sons Co., A., Elizabethtown, Pa. 

Burg Carriage Co., L., Dallas City, III. 

Case Plow Works, J. I., Racine, Wis. 

Case Threshing Machine Co., J. I., 
Racine, Wis. 

Challenge Co., Batavia, 111. 

Champion Potato Machinery Co., Ham- 
mond, Ind. 

Clark Carriage Co., J. L., Oshkosh, Wis. 

Columbia Wagon Co., Columbia, Pa. 

Columbiana Pump Co., Columbiana, 

Ohio. 
Cushman Motor Works, Lincoln, Nebr. 
Daln Mfg. Co., Ottumwa, Iowa. 
Deal Buggy Co., The, Jonesvllle, Mich. 
Deere & Co., Moline, 111. 
Deere & Mansur Co., Moline, III. 
De Laval Separator Co., New York, 

N. Y. 
Delker Bros. Buggy Co., Henderson, 

Ky. 
Demlng Co., The, Salem, Ohio. 
Dempster Mill Mfg. Co., Beatrice, Nebr. 
Douglas, W. ft B., Mlddletown, Conn. 
Dowagiac Drill Co., Dowaglac, Mich. 
Dunham Co., The, Berea, Ohio. 
Eckhart Carriage Co., Auburn, Ind. 
Eddy Plow Co., W., Greenwich, N. Y. 
Emerson-Brantingham Co., Rockford, 



Empire Plow Co., Cleveland, Ohio. 
Eureka Mower Co., Utlca, N. Y. 
Farquhar Co. (Ltd.), The A. B., York, 

Pa. 
Flint & Walling Mfg. Co., KendaUvllle, 

Ind. 
Florence Wagon Co., Florence, Ala. 
Foos Gas Engine Co., The, Springfield, 

Ohio. 
French & Hecht, Davenport, Iowa. 
Gale-Hooper Co., Memphis, Tenn. 
Gale Mfg. Co., Albion, Mich. 
Gay Co., S. G., Ottawa, 111. 
Gehl Bros. Mfg. Co., West Bend, Wis. 
Geneva Metal Wheel Co., Geneva, Ohio. 
Hart Grain Weigher Co., Peoria, III. 
Hartman Mfg. Co., Vincennes, Ind. 
Havana Metal Wheel Co., Havana, III. 
Henderson Wagon Works, Henderson, 

Henry & Allen, Auburn, N. Y. 

Herschel Mfg. Co., R., Peoria, Hi. 

Holt Mfg. Co., The, Peoria, III. 

Hoover Mfg. Co., The, Avery, Ohio. 

Huber Mfg. Co., Marlon, Ohio. 

Indiana Wagon Co., Lafayette, Ind. 

International Harvester Co., Chicago, 
III. 

James Mfg. Co., Fort Atkinson, Wis. 

James & Graham Wagon Co., Mem- 
phis, Tenn. 

Jauesville Machine Co., The, Janesvllle 
Wis. 

Johnson & Field Mfg. Co., Racine, Wis. 

Joliet Mfg. Co., Joliet, HI. 

Kentucky Wagon Mfg. Co., Louisville, 
Ky. 

Keystone Steel & Wire Co., Peoria, lU. 

King & Hamilton Co., Ottawa, III. 

La Crosse Plow Co., La Crosse, Wis. 

Lansing Co., Lansing, Mich. 

Lauson Mfg. Co., The John, New Hol- 
steln, Wis. 

Lean Mfg. Co., Roderick, Mansfield, 
Ohio. 

Letz Mfg. Co., Crown Point, Ind. 

Little Metal Wheel Co., J. R., Qunlcy, 

111. 
Louden Machinery Co., Fairfield, Iowa. 
McClure Co., The, Saginaw, Mich. 
Madison Plow Co., Madison, Wis 
Mast, Foos & Co., Springfield, Ohio. 
Maytag Co., The, Newton, Iowa. 
Messinger Mfg. Co., Tatamy, Pa. 
Mllburn Wagon Co., The, Toledo, Ohio. 
Miller Wagon Co , Edina. Mo. 
Minnetonna Co., The, Owatonna, Minn. 
Mitchell Wagon Co., Racine, Wis. 



260 



FAKM-MACHINEBY TBADE ASSOCIATIONS. 



EXHIBITS. 



261 






il 



Moon Buggy Ck>., Joa W., St Louis, Mo. 
Moon Bros. Carriage Co., St Louis, 

Ma 
Moore Co., The Given, Spring Valley, 

HL 
Moyer Mfg. Co., Montevideo, Minn. 
Myers & Bro., F. E., Ashland, Ohio. 
Nash, Dnane H. (Inc.), Millington, 

N. J. 
•* New Way " Motor Co., The, Lansing, 

Mich. 
Nlles & Scott Co., La Porte, Ind. 
Northwestern Mfg. Co., Fort Atkinson, 

Wis. 
Ohio Cultivator Co., The, Bellevue, 

Ohio. 
Ohio Mfg. Co., The, Upper Sandusky, 

Ohio. 
Ohio Rake Co., Dayton, Ohio. 
Oliver Chilled Plow Works, South 

Bend, Ind. 
Owatonna Mfg. Co., Owatonna, Minn. 
Pattee Plow Co., Monmouth, 111. 
Pekln Wagon Co., Pekin, 111. 
Peoria Drill & Seeder Co., Peoria, 111. 
Perkins Windmill Co., Mishawaka, Ind. 
Peru Plow & Wheel Co., Peru, 111. 
Porter Co., J. E., Ottawa, 111. 
Randolph Wagon Works, Randolph, 

Wis. 
Richardson Mfg. Co.. The, Worcester, 

Mass. 
Robinson & Co., Richmond, Ind. 
Ross Co., The E. W., Springfield, Ohio. 
Rowe Mfg. Co., Galesburg, 111. 
Rumely Co., M., La Porte, Ind. 
Russell & Co., The, Massillon, Ohio. 
St Marys Machine Co., St. M;irys, Ohio. 
Sanders Plow Co., Newell, Chatta- 
nooga, Tenn. 
Sandwich Mfg. Co., Sandwich. III. 
Schuttler Co., Peter, Chicago, 111. 
Sechler Implement k Carriage Co., 

D. M.. Moline, 111. 



Sheffield Mfg. Co., Burr Oak, Mich. 
Silver Mfg. Co., Salem, Ohio. 
Smalley Mfg. Co., Manitowoc, W1& 
Star Drilling Machine Co., The, Akron, 

Ohio. 
Sterling Mfg. Co., Sterling, 111. 
Stoughton Wagon Co., The, Stoughton, 

Wis. 
Studebaker Corp., South Bend, Ind. 
Superior Hay Stacker Mfg. Co., Lin- 

neus. Mo. 
Sweet Co., B. F. ft H. L., Fond du 

Lac, Wis. 
Thomas Mfg. Co., The, Springfield, 

Ohio. 
Thornhill Wagon Co., The. Lynch- 
burg, Va. 
Tiger Drill Mfg. Co., Beaver Dam, Wis. 
Tower & Sons Co., The J. D., Men- 

dota. 111. 
Troy Wagon Works Co., The, Troy, 

Ohio. 
TurubuU Wagon Co., The, Defiance, 

Ohio. 
Tumey & Co., Joel, Fairfield, Iowa. 
U. S. Wind, Engine & Pump Co., Ba- 

tavia. 111. 
Van Brunt Mfg. Co., Horicon, Wis. 
Velie Carriage Co., Moline, 111. 
Vermont Farm Machine Co., Bellows 

Falls, Vt 
Western Wheeled Scraper Co., Aurora, 

111. 
White Buggy Co., Geo., Rock Island, 

111. 
Whitman Agricultural Co., St. Louis, 

Mo. 
Whitman ft Barnes Mfg. Co., The, 

Akron, Ohio. 
Wilder Strong Implement Co., Mon- 
roe, Mich. 
Winona Wagon Co., Winona, Minn. 
Wisconsin Carriage Co., JanesviUe, 

Wia 



ACTIVE MEMBEBS OF CLASS 2. 



Deere Plow Co., John, Omaha, Nebr. 
Deere Plow Co., The John, St. I^iouis, 

Mo. 
Deere Plow Co., John, Indianapolis, 

Ind. 
Deere Plow Co., John, Kansas City, 

Mo. 



Deere & Webber Co., Minneapolis, 

Mimi. 
Hudson & Thurber Co., Minneapolis, 

Minn. 
Sharpies Separator Co., Chicago, 111. 



ASSOCIATE MEMBERS. 



Acme White Lead & Color Works, De- 
troit, Mich. 

Alston-Lucas Paint Co., Chicago, 111. 

American Chain Co., Bridgeport, Conn. 

American Screw Co., Providence, R. I. 

Amencan Sheet & Tin Plate Co , Pitts- 
burgh, Pa. 

American Steel & Wire Co., Chicago, 
HI. 



American Varnish Co., Chicago, HI. 
Baeder, Adamson & Co., Chicago, 111. 
Belle City Malleable Iron Co., Racine, 

Wis. 
Berry Bros. (Ltd.), Detroit, Mich. 
Big Creek Colliery Co., Chicago, 111. 
Brown & Co. (Inc.), Pittsburg, Pa. 
Calumet Steel (3o., Chicago, 111. 
Cambria Steel Co., Chicago, HL 



/ 



Canadian Implement Trade, The, To- 
ronto, Ontario. • 

Carborundum Co., The, Niagara Falls, 
N. Y. 

Carnegie Steel Ck)., Pittsburg, Pa. 

Castle & Co., A. M., Chicago, 111. 

Chain Belt Co., Milwaukee, Wis. 

Chicago Malleable Castings Co., West 
Pullman, 111. 

Chicago Varnish Co., Chicago, 111. 

Clark Bros. Bolt Co., Milldale, Ck)nn. 

Cleveland Punch & Shear Works Co., 
The, Cleveland, Ohio. 

Cleveland Steel Tool Co., Cleveland, 
Ohio. 

Cleveland Wire Spring Co., The, Cleve- 
land, Ohio. 

Colonial Steel Co., Pittsburg, Pa. 

Continental Bolt & Iron Works, Chi- 
cago, HI. 

Cortland Welding Compound Ck)., Cort- 
land, N. Y. 

Cowin, Frederick & Co., Chicago, 111. 

Crucible Steel Co. of America, Pitts- 
burgh, Pa. 

Detroit Seamless Steel Tubes Co., De- 
troit, Mich. 

Detroit White Lead Works, Detroit, 
Mich. 

Devoe & Raynolds Ck)., Chicago, 111. 

Dodge Mfg. Co., Mishawaka, Ind. 

Domhoff & Joyce Co., Chicago, IlL 

£2dson Bros., Washington, D. C. 

Farm Implement News Co., Chicago, 
111. 

Farm Implement Publishing Co., Min- 
neapolis, Minn. 

Farm Machinery, St Louis, Mo. 

Garland Nut & Rivet Co., Pittsburgh, 
Pa. 

Gerts Lumbard Co., Chicago, 111. 

Gibson, Wm. D., Co., Chicago, 111. 

Glidden Varnish Co., Cleveland, Ohio. 

Graham Nut Co., Pittsburgh, Pa. 

Graton & Knight Mfg. Co., Worcester, 
Mass. 

Halcomb Steel Co., Chicago, HI. 

Hanna & Co., M. A., Detroit, Mich. 

Harrow Spring Ck)., Kalamazoo, Mich. 

Heath & Milligan Mfg. Co., Chicago, 111. 

Higgins Spring & Axle Co., Racine, 
Wla 

Highland Iron & Steel Co., The, Terre 
Haute, Ind. 

Illinois Steel Co., Chicago, 111. 

Implement Age Co., The, Springfield, 
Ohio. 

Implement Trade Journal Co., Kansas 
City, Mo. 

Inland Steel Co., CMcago, 111. 

Interstate Iron & Steel Co., Chicago, HI. 

Jackman & Co., B. S., Chicago, 111. 

Jones & Laughlin Steel Co., Pittsburgh, 
Pa. 

Kirk-Latty Co., Steubenville, Ohio. 

La Belle Iron Works, Steubenville, 
Ohio. 



Lackawanna Steel Co., Chicago, 111. 

Ladew, Estate of Edw. R., Glen Cove, 
Long Island, N. Y. 

Lake Erie Iron Co., Cleveland, Ohio. 

Link Belt Co., Chicago, 111. 

Louisiana Lumber Co., Cairo, 111. 

Lucas & Co., John, Philadelphia, Pa. 

Luehrmann, Chas. F., Hardwood Lum- 
ber Co., St. Louis, Mo. 

Michigan Bolt & Nut Works, Detroit, 
Mich. 

Michigan Sprocket Chain Co., Detroit, 
Mich. 

Moline Malleable Iron Co., St. Charles, 
111. 

Moline Paint Mfg. Co., Moline, 111. 

Morris, I. R., Chicago, 111. 

Mound City Paint & Color Co., St 
Louis, Mo. 

Mutual Wheel Co., Moline, 111. 

National Lead Co., Chicago, 111. 

National Malleable Castings Co., Chi- 
cago, 111. 

National Tube Co., Chicago, 111. 

Northwestern Malleable Iron Co., Mil- 
waukee, Wis, 

Norton Co., Chicago, 111. 

O'Brien Varnish Co., South Bend, Ind. 

Ohio Malleable Iron Co., Columbus, 
Ohio. 

Oliver Iron & Steel Co., Pittsburgh, Pa. 

Oliver Typewriter Co., Chicago, 111. 

Perfection Spring Co., Cleveland, Ohio. 

Pickands, Brown & Co., Chicago, 111. 

Pratt & Lambert (Inc.), Chicago, 111. 

Queen City Varnish Co., Cincinnati, 
Ohio. 

Racine Lumber & Mfg. Co., Rachie, 
Wis. 

Rand-McNally Co., Chicago, HI. 

Reeves Pulley Co., Columbus, Ind. 

Reilly & Son, P., Newark, N. J. 

Republic Iron & Steel (30., Pittsburgh, 
Pa. 

Rogers, Brown & Co., Chicago, 111. 

Russell, Burdsall & Ward Bolt & Nut 
Co.. Port Chester, N. Y. 

Ryerson & Son, Jos. T., Chicago, HI. 

Safety Emery Wheel Ck)., The, Spring- 
field, Ohio. 

Salisbury & Co., W. H., Chicago, 111. 

Scully Steel & Iron Co., Chicago, 111. 

Shadbolt & Boyd Iron Co., Milwaukee, 
Wis. 

Sharon Steel Hoop Co., Sharon, Pa. 

Shepard Co., The Henry O., Chicago, 
HI. 

Sherwin-Williams (3o., The, Chicago, 
IlL 

Standard Chain Co., Pittsburgh, Pa. 

Standard Tool Co., The, Cleveland, 

Ohio. 
Standard Varnish Works, Chicago, 111. 

Tousey Varnish Co., Chicago, 111. 

Townsend Co., C. C. & E. P., New 

Brighton, Pa. 
Transue & Williams, Alliance, Ohio. 



262 



FABM-MACHINEBY TRADE ASSOCIATIONS. 



L'nion Drawer Steel Co.. Beaver Falls, 

Pa. 
U. 8. Pressed Steel C5o., Ypsilanti, Mich. 
Universal Rolling Mill Ck)., Bridge- 

ville, Pa. 
Upson Nut Co., The, Cleveland, Ohio. 
Warren Iron & Steel Co., Warren, Ohio. 
Western roondry Co., The, Chicago, 111. 



Whitaker Mfg. Co., The, Chicago, IlL 

Whiting Foundry Equipment Co., Har- 
vey 111. 

Williams,* White & Co., Moline, 111. 

Wisconsin Steel Co., Chicago, 111. 

Youngstown Iron & Steel Co., Youngs- 
town, Ohio. 



Exhibit 6. 
list of membebs of the fabm wagon depabtment of the 

NATIONAIi IMPLEMENT ft VEHICLE ASSOCIATION, AS OF AU- 
GUST 20, 1014. 



Abingdon Wagon Co., Abingdon, 111. 

Acme Wagon Co., Emlgsville, Pa. 

Auburn Wagon Co., Martinsburg, W. Va. 

Bain Wagon Co., Kenosha, Wis. 

Brown Mfg. Co., Zanesville, Ohio. 

Columbia Wagon Co., Columbia, Pa. 

John Deere Wagon Co. (Deere & Co.), 
Moline, 111. 

Emerson-Brantlngham Co., Bockford, 
HI. 

Henderson Wagon Works, Henderson, 
Ky. 

Indiana Wagon Co., La Fayette, Ind. 

International Harvester Co., Chicago, 
111. 

James & Graham Wagon Co., Mem- 
phis, Tenn. 

Kentuctcy Wagon Mfg. Co., Louisville, 
Ky. 



Mllbum Wagon Co., Toledo, Ohio. 
Miller Wagon Co., Edina, Mo. 
Mitchell Wagon Co., Racine, Wis. 
Northwestern Mfg. Co., Fort Atkinson, 

Wis. 
Pekin Wagon Co., Pekin, 111. 
Randolph Wagon Works, Randolph, 

Wis. 
Schnttler Co., Peter, Chicago. 111. 
Stoughton Wagon Co., Stoughton, Wis. 
Studebaker Corp., South Bend, Ind. 
Sweet Co., B. F. & H. L., Fond du Lac, 

Wis. 
Thornhill Wagon Co., Lynchburg, Va. 
Troy Wagon Co., Troy, Ohio. 
Tumbull Wagon Co., Defiance, Ohio. 
Tumey & Co., Joel, Fairfield, Iowa. 
Winona Wagon Co., Winona, Minn. 



Exhibit 7. 

LIST OF MEMBEBS OF THE PLOW AND TILLAGE IMPLEMENT 
BEPABTMENT OF THE NATIONAL IMPLEMENT & VEHICLE AS- 
SOCIATION, AS OF AUGUST 20, 1914. 



American Seeding Machine Co., Spring- 
field, Ohio. 

Avery & Sons, B. F., Louisville, Ky. 

Bailor Plow Mfg. Co., Atchison, Kan& 

Brown Mfg. Co., Zanesville, Ohio. 

Case Plow Works, J. I., Racine, Wis. 

Deere & Co., Moline, 111. 

De<^re & Mansur Co., Moline. HI. 

Dempster Mill Mfg. Co., Beatrice, 
Nebr. * 

Eddy Plow Co., W., Greenwich, N. Y. 

Emerson-Brantingham Co., Rockford, 
111. 

Empire Plow Co., Cleveland, Ohio. 

Farquhar Co. (Ltd.), A. B., York. Pa. 

Gale Mfg. Co., Albion, Mich. 

Hartman Mfg. Co., Vincennes, Ind. 

International Harvester Co., Chicago, 
DL 

Janeietville Machine Co., Janesville, 
Wia 



La Crosse Plow Co., La Crosse, Wis. 

Lean Mfg. Co., Roderick, Mansfield, 
Ohio. 

Messinger Mfg. Co., Tatamy, Pa. 

Nash (Inc.), Duane H., Millington, 
N. J. 

Ohio Rake Co., Dayton, Ohio. 

Oliver Chilled Plow Co., South Bend, 
Ind. 

Pattee Plow Co., Monmouth, 111. 

Peru Plow ft Wheel Ck)., Peru, 111. 

Rumely Company, M., CJhlcago, 111. 

Sechler Implement & CJarriage Co., D. 
M., Moline, 111. 

Sterling Mfg. Co., Sterling 111. 

Sanders Plow CJo., Newell, Chatta- 
nooga, Tenn. 

Tower & Sons <j0.» J. D., Mendota, Hi. 



EXHIBITS. 



Exhibit 8. 



263 



LIST OF MEMBEBS OF THE GBAIN DRILL AND SEEDER DEPABT- 
MENT OF THE NATIONAL IMPLEMENT & VEHICLE ASSOCIATION, 
AS OF AUGUST 20, 1914. 



American Seeding Machine Co., Spring- 
field, Ohio. 

Deere & Co., Moline, 111. 

Dempster Mill Mfg. Co., Beatrice, Nebr. 

Dowagiac Drill Co., Dowagiae, Mich. 

Emersou-Brantingham Ck)., Rockford, 
111. 

Farquhar Co. (Ltd.), A. B., York, Pa. 

International Harvester Co., Chicago, 
lU. 



La Crosse Plow Co., La Crosse, Wis. 
Owatonna Mfg. Co., Owatonna, Minn. 
Peoria Drill & Seeder Co., Peoria, lU. 
Sterling Mfg. Co., Sterling, 111. 
Thomas Mfg. Co., Springfield, Ohio. 
Tiger Drill Mfg. Co., Beaver Dam, Wis. 
Van Brunt Mfg. Co., Horicon, Wis. 



Exhibit 9. 

LIST OF MEMBERS OF THE SALES MANAGERS' DEPARTMENT OF 
THE NATIONAL IMPLEMENT & VEHICLE ASSOCIATION, AS OF 
AUGUST 20, 1914. 



American Potato Machinery Co., Ham- 
mond, Ind. 

American Seeding Machine Co., Spring- 
field, Ohio. 

Ann Arbor Machine Co., Ann Arbor, 
Mich. 

Appleton Mfg. Ck)., Batavia, 111. 

Aspinwall Mfg. Ck)., Jackson, Mich. 

Avery Co., Peoria, 111. 

Avery & Sons, B. F., Louisville, Ky. 

Baker Mfg. Co., Evansville, Wis. 

Bateman Mfg. Co., Grenloch, N. J. 

Bauer Bros. Co., Springfield, Ohio. 

Blount Plow Works, Evansville, Ind. 

Brown Mfg. Co., Zanesville, Ohio. 

Buch's Sons Co., A., Elizabethtown, Pa. 

Case Plow Works, J. I., Racine, Wis. 

Champion Potato Machinery Co., Ham- 
mond, Ind. 

Cushman Motor Works, Lincoln, Nebr. 

Deere & Co., Moline, 111. 

Deere Plow Co., John, Moline, 111. 

De Laval Separator Co., Chicago, 111. 

Dempster Mill Mfg. Ck)., Beatrice, Nebr. 

Dowagiac Drill Co., Dowagiac, Mich. 

Douglas, W. & B., Middletown, Conn. 

Eckhart Carriage Co., Auburn, Ind. 

Emerson-Bra ntingham Ck)., Rockford, 

111. 

Farquhar Ck). (Ltd.), A. B., York, Pa. 

Flint & Walling Mfg. Co., Kendallville, 
Ind. 

Gale Mfg. Co., Albion, Mich. 

Gehl Bros. Mfg. Co., West Bend, Wis. 

Geneva Metal Wheel Co., Geneva, Ohio. 

Hartman Mfg. Ck)., Vincennes, Ind. 

Herschel Mfg. Co., R., Peoria, 111. 

International Harvester Co., Chi- 
cago, 111. 

James Mfg. Ck)., Fort Atkinson, Wis. 

Janesville Machine Co., Janesville, 
Wis. 

Johnson & Field Mfg. Co., Racine, Wis. 

La Crosse Plow Ck)., La Crosse, Wis. 

Lauson Mfg. Co., J., New Holsteln, Wis. 



Little Metal Wheel Co., J. R., Quincy, 

111. 
Louden Machinery Co., Fairfield, Iowa. 
Madison Plow Co., Madison, Wis. 
McClure Co., The, Saginaw, Mich. 
Mast, Foos & Co., Springfield, Ohio. 
Maytag Co., The, Newton, Iowa. 
Milbum Wagon Co., Toledo, Ohio. 
Minnetonna Co., Owatonna, Minn. 
Mitchell Wagon Co., Racine, Wis. 
Moore Co., Given, Spring Valley, IlL 
Ohio Cultivator Co., Bellevue, Ohio. 
Ohio Rake Co., Dayton, Ohio. 
Oliver Chilled Plow Co., South Bend, 

Ind. 
Perkins Wind Mill Ck)., Mishawakajnd. 
Peoria Drill & Seeder Co., Peoria, 111. 
Randolph Wagon Works, Randolph, 

Wis. 
Robinson & Co., Richmond, Ind. 
Ross Co., E. W., Springfield, Ohio. 
Rumely Co., M., Chicago, 111. 
St. Marys Machine Co., St. Mays, Ohio. 
Smalley Mfg. Co., Manitowoc, Wis. 
Sandwich Mfg. Co., Sandwich, III. 
Sechler Imp. & Cge. Co., D. M., Moline, 

111. 
Sharpies Separator Co., Chicago, 111. 
Thomas Mfg. Co., Springfield, Ohio. 
Tower & Sons Co., J. D., Mendota, 111. 
Troy Wagon Works Co., Troy, Ohio. 
Tumbull Wagon Co., Defiance, Ohio. 
Tumey & Co., Joel, Fairfield, Iowa. 
Van Bmnt Mfg. Co., Horicon, Wis. 
Vermont Farm Machine Co., Bellows 

Falls, Vt. 
Wilder- Strong Implement Co., Mon- 
roe, Mich. 
Whitman Agricultural Co., St Louis, 

Mo. 
Whitman & Barnes Mfg. Co., Akron, 

Ohio. 
Winona Wagon Co., Winona, Minn. 
Wisconsin Carriage Co., Janesville, 

Wis. 



S64 



f ARM-MACHINEMY TRADE ASSOClATTONS. 



Exhibit 10. 



IiIST 07 HEMBEBS OF THE FOREIGN TBABE MANAGERS' DEPART- 
MENT OF THE NATIONAL IMPLEMENT A VEHICLE ASSOCIATION, 
AS OF AlTGirST 20, 1914. 



American Seeding Machine Ck>., Spring- 
field. Ohio. 

Appleton M^. Co., Batavia, HL 

Aspinwall Mfg. Co., Jackson, Mich. 

Associated Mfra. Co., Waterloo, Iowa. 

Avery Co., Peoria, 111. 

Cnshman Motor Works, Lincoln, Nebr. 

Deere & Co., Moline, 111. 

Farquhar Co. (Ltd.), A. B., York, Pa. 

FUnt & Walling Mfg. Co., Kendallyille, 
Ind. 

Herschel Mfg. Co., B., Peoria, DL 



JanesTllle Machine Co., The, Janesville, 

Wis. 
La Crosse Plow Co., La Crosse, Wis. 
Mitchell Wagon Co., Racine, Wis. 
Northwestern Mfg. Co., Fort Atkinson, 

Wis. 
Emerson-Brantingham Co., Rockford, 

111. 
Peoria Drill & Seeder Co., Peoria, 111. 
Robinson & Co., Richmond, Ind. 
St. Marys Machine Co., The, St. Marys, 

Ohio. 



Exhibit 11. 

REPORT OF COMMITTEE OF NATIONAL WAGON MANUFACTURERS* 
ASSOCIATION APPOINTED IN NOVEMBER, 1903, TO FORMULATE 
A PLAN FOR THE BETTER MAINTAINING OF PRICES— REPORT 
MADE TO ASSOCIATION FEBRUARY 3, 1904. 

To the National Waff on Makers Association: 

Your committee appointed at the last meeting to recommend some 
plan by which the Association could be made of more practical value 
to its members, met in South Bend, on January 13, and devoted the 
day to the discussion of the different suggestions that had been made. 
One of these was somewhat discussed at the meeting of the Associa- 
tion in November, viz: — ^the employment of a commissioner who 
should have control of and regulate prices in the different localities 
for each manufacturer, gjving due consideration to the usual differ- 
ences in prices of the various brands of wagons. 

At our meeting in South Bend Mr. Geiger presented a plan based 
on this suggestion. Your committee after thorough discussion of the 
whole matter, decided it would be unwise to at once attempt the regu- 
lation of selling prices on complete wagons, but believed it well worth 
the cost of the experiment to attempt first to establish a minimum 
price for each size and kind of wagon box and for all parts of wagon 
Doxes. Aside from the fact that some of our members use cotton- 
wood and others poplar, the details of construction, size and kind of 
material used, do not materially differ. They decided, therefore, to 
recommend to the Association the adoption of the following plan of 
procedure, believing if we can make it work in connection with 
wagon beds and parts, we can then proceed with such parts as seats, 
bribes and other extras, standard widths and thicknesses of extra 
tire and possibly the establishment of standard list prices. While it 
would not be either practical or desirable to have all list prices alike, 
because of the variation in specifications of the different factories on 
the various sizes and kinds of wagons, it is the belief of your com- 
mittee that by taking some standard specifications for each size 
wtmi and establishing a list price thereior, a plan could be devised 
tofigure out the proper list price for any wagon of the same size by 



EXHIBITS. 



265 



figuring upon a uniform basis for any variation in specifications 
established. The greatest variation would undoubtedly be found in 
the size of tire. Without further discussion of the future work we, 
therefore, recommend as a starter that we undertake the establish- 
ment of minimum prices to jobbers, carload buyers and less than 
carload buyers of wagon beds of different sizes, and of different ma- 
terial and of all parts of same, like top boxes, tip top boxes, etc., that 
to accomplish this, 

First, The Association shall appoint a committee to be laiown as the 
Executive Committee, and to consist of from nine to twelve repre- 
sentative manufacturers who shall have charge of the work. 

2nd, That the Executive Committee shall employ as a permanent 
secretary a competent man, who under direction of the committee 
shall devote his entire time to the work. He shall gather such infor- 
mation and details as to materials used, construction, estimated 
costs, and selling prices, as may be decided on by the committee, and 
without mentioning names of members, tabulate the information 
and present it to the committee in that form. 

The committee shall then prepare, and through the Secretary, send 
to each member of the Association the schedule of minimum prices 
for the different classes of trade, on beds of all sizes and kinds and 
parts thereof; that the report, when made, shall be the unanimous 
recommendation of the committee to which they are willing to 
pledge themselves, and that upon its adoption by the Association all 
memoers thereof shall agree to be governed thereby and in good faith 
carry it out in their business. 

3rd. To defray the expenses of the Secretary and actual traveling 
and hotel expenses of the committee, a fund shall be raised by levy- 
ing an assessment upon each member of the association equal to one 
quarter of one per cent upon the shop pay roll of each member for 
the year 1903. In figuring the shop pay roll it shall include all em- 
ployees except officers, superintendents and salesmen, but including 
all foremen ; members manufacturing other lines than farm wagons, 
shall, of course, only include that part of his pay roll which properly 
belongs to the wagon business. 

It is the belief of the committee that if we heartily and faithfully 
pursue this course and live up to the recommendation of the com- 
mittee, the increase in profits to each member shall many times exceed 
the amount of the assessment he may be called upon to pay. 

It is the earnest hope of the committee these recommendations may 
be heartily endorsed and adopted by the unanimous vote of all the 
members of the association. 



Exhibit 12. 
question sheet relative to prices of members, issued 

BY THE NATIONAL WAGON MANUFACTURERS' ASSOCIATION, 
JANUARY 1, 1906. 

1 : Have your new advanced prices been placed in the hands of all 
your selling agencies? If not, why? — Ans: . 

2: Are your advances to both jobber and dealer in line with the 
recommendation in all cases ? Explain any exceptions. — Ans : . 



4 



266 



FABM-MACHIKEBY TBADE A880CIATI0K8. 



EXHIBITS. 



267 



II' 



S: Are your instructions that from Jan. 1st on, you will take no 
more orders at your 1905 prices? — Ans: . 

4 : Did you, or your jobbing or selling agent for you, ac5cept after 
date of last meeting (Nov. 16) any orders for shipment after Jan. 
1-06 at your 1^5 prices? — ^Ans: . 

5 : If some such orders are taken, why were they given such pref- 
erence? — ^Ans: . 

6: How does the volume of your trade since last meeting to Jan. 
1st compare with the same period of 1904? — Ans: . ^ 

7: Does the present condition of the material markets indicate to 
you that manufacturing cost is likely to diminish in the near fu- 
ture ? — ^Ans : . 

8: Is there any question in your mind but that the advance on 
wagons should be and can be maintained, and are you determined 

to maintain it? — ^Ans: • 

(Signed) w 



Date: 



1906. 



EXHIBFT 13. 

BEPBBSENTATIVE SHEETS SHOWING DIFFEBENCES IN STANDABD 
SPECIFICATIONS AND EQUIPMENT FOR FABM WAOONS SOLD IN 
DIFFEBENT TEBBITOBIES ADOPTED BY THE NATIONAL WAGON 
MANT7FACTTJBEBS' ASSOCIATION IN 190& 

SfAKDABD Equipment fob Fabm Wagons. 

(Adopted December 9, 1908. RepUces all prevlotis issuei.) 

Showing equipment commonly used in the following trade terri- 
tories :^ 
Arkansas: Arkansas and Eastern Texas. 

Dallas: All of Texas and Oklahoma North to Canadian Biver. 
Iowa : Iowa East of Western two tiers of Counties. 
Illinois: Illinois North of Springfield. 
Indiana: Entire State. 

Kansas City : Kans., W. Mo., and Okla., South to Canadian Kiver. 
Kentucky and Tennessee : Entire States. 
Ohio: Entire State. 
Omaha : Nebraska and Western Iowa. 

Minneapolis: Minnesota, N. & S. Dakota except Black Hills. 
St Louis: Eastern and Southern Missouri and Southern Illinois. 
Southeastern : Ala., Ga., Fla., No. and So. Car., Va., and W. Va. 
Southern: All Southern States not included in Southeastern. 
Western and Mountain States: All West of East line of Colorado. 

RECOMMENDATION. 

That we adopt the Standard Equipment with the changes recom- 
mended by the Secretary, and that complete copies of it be furnished 

» The sheets lor only three of these territories are shown in this exhibit. These indi- 
cate the extmt and character of differences in spedflcations and equipment for different 
Mrrltorlea. 



to our members, as a guide or information to them of what is ordi- 
narily considered standards in the various territories outlined, leav- 
ing it optional with each member as to how far he would use these 
equipments in furnishing his goods. 



STANDARD EQUIPMENT. 

Report of the National Wagon Manufacturers^ Association to its 
members of what careful inquiry shows to he the equipment deemed 
necessary in the territory outlined below, 

(Territory: Kanna City. Comiuising: Kansas, Western Missouri and Oklahoma, South to Canadian 

River.) . . 



1. Size of Skein or Axle 

Z. Helghrof wiiMJa.*.'!! 

4. Siieof Tire 

6. Drop or stiff Pole ... 

6. Length of Box 

7. Total depth of Box.. 



Narrow 

40-48 

Ifxi 

Drop 

KK 

20" 



2f 

Narrow 

44-52 

UxJ 

Drop 

W^' 

24" 



3 


3i 


Narrow 


Narrow 


44-52 


44-52 


IJxl 


lixf 


Drop 


Drop 


10' 6" 


10' 6" 


26" 


26" 



3i 

Narrow 

44-52 

Ifx} 

Drop 

10' 6" 

28" 



% 



arrow 
44-52 
IJxl 
Drop 
10'^' 
28" 



The following items are considered "regular" as indicated and 
usually figured in price of standard or base wagon — The items 
marked "extra" are regular but the charge for them is added to 
base price, while those marked " special " are not commonly used in 
the territory and of course should be charged for extra. 

1. Bottom reinforced over rear Bolster Regular on all sizes. 

2. Patent Endgate Do. 

3. Common Endgate Not used. 

4. Top box Fasteners Regular on all sizes. 

6. Anti-Spreaders .- Do. 

6. Grain Cleats Do. 

7. Spring Seat- Do. 

8. Lazyback ^^-. _^ Do. 

9. 5th Cleat or Sill Extra on all sizes. 

10. Foot Lever G«ar Brake Regular on all sizes. 

11. Gear Brake hook up irons Do. 

12. Bow Staples *__.. ^_^__ __^_ Not used. 

13. Tool or Jockey Box Do. 

14. 3rd Top Box Extra on all sizes. 

15. Anti-Spreaders and Fasteners for third top boxes Do. 

16. Boot End Beds with Joint Rods Not used. 

17. Bows Do. 

18. Feed Boxes Do. 

19. Seat on Risers Special on all sizea 

20. Lock Chains Extra on all sizes. 

21. Bed Brake Do. 

22. Reversible Gear Brake Special on all sizes. 

23. Clipped Gear Brake Do. 

24. Riveted Rims Do. 

25. Wide Tires Do. 

26. Bois D'Arc Felloes Not used. 



* 



268 



h! 



FABM-MACHINEBY TBADE ASSOCIATIONS. 
STANOABD EQUIPMENT. 



Report of the National Wagon Manufacturers* Association to its 
members of what careful inquiry shows to he the equipment 
deemed necessary in the territory outlined helow. 



(Territoty: Soatheaaton. Comprfaiai: 



OtonkL floilds. N. * 8. CvoUns, Virginia A W* 
TWO HOBSB. 



1. SIm of Skein or Axlo 

3. Track 

•.Hri^tofWhMls.... 

4. Sin of Tire 

5. Drop or stiff Pole. . . 

%. L«Ktho(Box 

7. Total depth of Box. . 



»TS 
Wide 



Stiff 

V 

Ifl" 



11 8A 

g-T8 

Wide 

Stiff 

W 

IT' 



1|8A 

21 TS 
Wide 

Uxi 

Stiff 

W 



11 SA 
3TS 
Wide 
4«-52 

SUff 

Wt" 

34" 



11 SA 

3i-TS 

Wide 

44-63 

liz| 

Stiff 

KKd" 

24" 



3J-T8 
Wide 

usa 

l|xi 

Stiff 

WQ" 

36" 



^■* 



The following items are considered "regular" as indicated and 
usually figured in price of standard or base wagon— The items 
marked " extra " are regular but the charge for them is added to 
base price, while those marked " special " are not commonly used in 
!^ territory and of course should be charged for extra. 



>%1» 



1. 
2. 

a 

4. 

6. 

e. 

7. 

8. 

9. 
10. 
11. 
12. 
13. 
14. 
15. 
16. 
17. 

la 

19. 
20. 
21. 
22. 
23. 
24. 
25. 
26. 
27. 

2a 

29. 



Bottom reinforced over rear Bolster Special. 

Patent Endgate. Regular on aU siie& 

Common Endgate ^^» 

Top box Fasteners ^^^ used. 

Anti- Spreaders ^' 

Grain Cleftts ^ ^^^' „ _, 

Spring Seat ^^ra <«» all sizes. 

Lazyback Not used.. 

5tb Cleat or Sill Special. 

Foot Lever Gear Brake Extra on all sizea 

Gear Brake hook up irons Not used. 

Bow Staples S?^*^^\, 

Tool or Jockey Box Not used. 

3rd Top Box ^ 

Anti-Spreaders and Fasteners for third top boxes — Do. 

Boot End Beds with Joint Rods Special. 

3Q^g Not used. 

Feed Boxes 1. ^ P®* 

Seat on Risers Special. 

Lock Chains Extra on all sizes. 

Bed Brake ^ P?- 

Reversible Gear Brake Special. 

Clipped Gear Brake Do. 

Riveted Rims I>o- „ 

Wide Tires Extra on all 

Bois D'Arc Felloes Not used. 

Club-Stakes Special. 

Round Reach Do. 

Ox Tongue ^^' 



^■t 



•■# 



EXHIBITS. 



STANDARD EQUIPMENT. 



269 



Report of the National Wagon Manufacturers^ Assodafion to its 
members of what careful inquiry shows to be the equipment deemed 
necessary in the territory outlined below. 

(Twritory: Western and Mountain. Compririag: AH West of East Line of Colorado.) 



1. SiM of Skein or Axle 

2. Track 

3. Height of Wheels. ... 

4. Site of Tire 

6. i>rop or stiff Pole . . . 

6. Length of Box 

7. Total depth of Box.. 



2}SS 
Either 

40-48 

Drop 

IC 

20" 



21 SS 
Either 
44^2 
lixf 

Drop 

ice" 

22" 



3 88 

Eithw 

44-52 

Uxl 

Drop 

IC©" 

24" 



3^88 

Either 

44-52 

Drop 

24" 



3^88 

Eithw 

44-52 

if** 
Drop 

26" 



31 8S 

Either 

44-^ 

2xilcl 

Drop 

26" 



The following items are considered "regular" as indicated and 
usually figured in price of standard or base wagon—The items 
marked " extra " are regular but the charge for them is added to 
base price, while those marked " special " are not commonly used in 
the territory and of course should be charged for extra. 

1. Bottom reinforced over rear Bolster i. Regular on all sizes. 

2. Patent Endgate Extra on all sizes^ 

3. Common Endgate 5T !L 

4. Top box Fasteners ^^t useo. 

6. Anti-Spreaders „ ^ ^o. 

6. Gram-Cleats Extra on all sizes. 

7. Spring Seat Regular on all sizes. 

8 Lazyback _ — ijo. 

a 6th Cleat "oVs'llC Extra on all sizes. 

10, Mountain or California Brake Regular on aU sizes. 

11. Gear Brake hook up irons Not used. 

12 Bow Staples Regular on all sizes but 

not always wanted. 

18. Tool or Jockey Box -Regular on all sizes. 

14. 3rd Top Box Extra on all sizes. 

15. Anti-Spreaders and Fasteners for third top boxes — Not used. 

16. Boot End Beds with Joint Rods Do. 

17. Bows S\*^^^ **^ ^*^ 

18. Feed Boxes got usea 

19. Seat on Risers ^P?^^ * i, „,„^ 

20. Lock Chains g^tra on all sizes. 

21. Bed Brake Not used. 

22. Reversible Gear Brake ^^ 

23. Clipped G^r Brake 1^- 

24. Riveted Rims bpeciai. 

25. Wide Tires _ , ^^ 

26. Bois D'Arc Felloes ^ „' ,, ^„^^ 

27. 12 and 14 foot Reaches Exti^ on all sizes. 

g; ciinfo?^lireS:::::~::::^^^^^^^^^^ on au size* 



\l 



270 



FABM-MACHINEBY TBADE ASSOCUTIONS. 

ExHiBir 14. 



OBNEBAL LETTEB ISSUED BY ™BNATIONAL WAGON MAN^ 
TOBEES' ASSOCIATION BELATIVE TO TBADE CONDITIONS IN 
DECEMBEB, 1908. 

General Offices, 

625-627-529 American Trust Building, 

Chicago, Dec. ^8-1908. 

PRESENT AND FUTURE TRADE CONDITIONS. 

CtEjNTLEI^IEN * 

You undoubtedly have been made aware, through the trade papers 
and other channels of publicity, that manufacturers representmg the 
greater part of the farm and heavy wagon output of this country 
have notified the trade of an advance in their sellmg prices May 1st 
1909 to the extent of at least 10% over present figures, limiting the 
time of shipment on orders taken at present prices to April 30th, lyuy. 

With other manufacturers who have recently reviewed the con- 
dition of their business, going back, say, for a period of fave years, 
this action has not only been indorsed but like action will be taken 
by them, and our purpose in calling your attention to the matter is 
that we believe it should receive universal recognition. 

Permit me to suggest a few propositions that have a vital bearmg 
on this question as to whether present selling prices are prohtable or 

^Firat :Vagon materials (particularly Woodstock) , labor, and over- 
head or fixed expenses, have increased beyond any advance m seUing 
prices of wagons during the past ten years. 

Second: During recent years when trade volume was large, tne 
ratio of manufacturing profit greatly decreased. 

Third • With the return of trade demand to normal, present selling 
prices cannot return fair profits on the large investment necessary to 

this line of manufacture. . ., • • ^ *_^«f 

Fourth : It has been necessary to greatly increase our mvestment 
m order to provide our usual supply of wagonstock because of the 
rapid increase in price of that material, and we are confronted with 
the certainty of still farther advances. . ^u- v 

Fifth : During the past ten years a number of concerns m this line, 
neglecting to give attention to these encroachments on profits and 
changing conditions, have quit, failed, or become financially embar- 
rassed— others may follow from the same cause. ^u x u 

Sixth: Retail profits on wagons have also declined, so that by 
many they are only handled of necessity, as with salt or sugar, and 
because oi this condition the personnel of those who retail our prod- 
uct as to financial worth or business ability is rapidly getting poorer. 

Seventh : We believe it is a matter of self-preservation that a re- 
adjustment of these conditions should occur in 1909, not only by an 
advance in selling prices of the manufacturer but m the prices of 
the retailer as well, and we should immediately explain the situa- 
tion to our trade and support them in making their adjustments. 

Eighth- The principal consumer of our product, the farmer, has 
received the greatest share of prosperity and his ability to pay a 
fair price for his necessary working equipment is unquestioned, so 
that this reasonable advance in the price of his wagon wiU m no way 
delay his purchasing. 



f** » 



EXHIBITS. 



271 



Our purpose in presenting this matter to vou is two-fold: First, 
that you may understand that the action taken by these manufac- 
turers was not arbitrary or without absolute justification, and sec- 
ondly, we believe that similar action wiU be taken by every intelli- 
gent manufacturer who values the future of his busmess. We 
believe, furthermore, that it is to the best interests of our trade that 
it should not be kept in a constantly disturbed condition and 4;hat it 
these adjustments be made now, simultaneously, they wiU be accepted 
on their merits, just as a necessary advance m freight rates or taxa- 
tion and we shall go forward on a new and more satisfactory basis, 
with new prices remaming stable in all probability for some time. 

CompetSion in the wagon business will never permit either the 
manufacturer or retailer to obtain an exorbitant profit, and therem 
lies the protection of the consumer, but it should not prevent the manu- 
facturer from getting fair returns from his labor and mvestment. 

Would be pleased to have you acknowledge this, with an expres- 
sion of your views, if you are interested. ^ 
Yours truly, 

EWM-H. 



Exhibit 15. 

■RTTVTSED TIBB LIST— WAGON DEPARTMENT— NATIONAL IMPLB- 
^^? AND VEHICLE ASSOCLA.TION-BECOMMENDED MAKCH 14, 

1907. TO BEPLACE ALL PBEVIOXTS ISSUES. 

(Previous Issue Aug. 20, 04. This issue May 1, 1911.) 
yet extra charge for odd or wide tires. 
ONE AND TWO HORSE WAGONS. 



Regular 
Tires 



OddTires 



^ 



ijxi 



9^ ^ 

luX 
luX 

Ux 

X 

X 
L X 
L X 

xl 
3 X 
3 X 
2 X 

2 X 

3 X 
34x 

?* 
3 X 

S X 

3 X 

3 X 
3f X 
3>x 
}x 
Six 

4 x 



to. 29 

.58 



l|x| l|xA 



$0.86 
1.15 



4 
4 

4 
5 
5 
5 
6 



1.78 
3.05 



3.57 



IfxJ 



Ux| 



$0.40 ' 
.09 $0.29 



2.36 
3.62 



5.18 



6.96 



4.14 
5.75 



1.90 
3.16 



3. 68 
5.29 



$0.92 
1.84 



UxA 



1.50 
2.76 



3.28 
4. 



5.75 



7.53 



5.29 



7.07 



2.13 
3.39 



3.91 
5.52 



Uxj 



lixA ljx| 



$1.38^$0.92 
1,84 
1.44 
2.59 
1.90 



1.67 
2.93 
4.20 



3.45 
5.06 



4.1 
6.84 



6.67 
8.97 



5.52 

7.48 



7.30 
9.60 



lixi 



1.21 
2.47 
3.74 



5.06 
7.02 



6.84 
9.14 



2.99 
4.60 
6.21 



$0.46 

1.38 

.98 

2.13 

1.44 



$0. 



.75 
2.01 
3.28 



2.53 
4.14 
5.75 



92 
52 
67 
98 
01 

29 

55 
82 



Ifxl 



llxj 



1.09 



.63 
1.90 
3.16 



Ifxl 



l|xl 



2xi 



2x1 



$0.75 $1.15 
46 
50 



4.60 
6.56 



6.38 
8.68 



8.45 
11.10 



4.14 
6.10 
8.05 

"6.'92 

8.22 

10.52 

"7.99 
10.64 



13.34 
16.68 



3. 
5. 

7. 

5.' 

7. 

10. 

7.' 
10. 



68 
64 
59 

46 
76 
06 

53 
18 



1.15 
2.76 
4.37 



2.76 



.88 
.22 



4.54 
6.84 
9.14 

6.'6i 
9.26 



11.96 
15.30 



1. 
3. 

1. 
2. 
3. 
4. 

3. 

4. 

6. 

3. 

5. 

7. 

9. 

4. 

7. 

9. 
11. 

7. 

9. 
12. 
14, 
12. 
15. 
19. 



$0.46 
2.84 



$1. 
3. 



04 
30 
57 
83 



16 
77 
38 
16 
12 
07 
03 
95 
25 
55 
85 
02 
66 
31 



1.Z7 
2.53 
3.80 



36 
70 
03 



2 

3 

5 

2. 

4. 

6. 

7. 

3. 

6. 

8. 
10. 

5. 

8. 
11. 



09 
47 



1.90 
3.16 
4.43 



9513 



13 

74 
35 
13 
08 
04 
99 
91 
21 
51 
81 
98 
63 
27 
92 
33 
66 
00 



2. 

4. 

5. 

2. 

4. 

6. 

8. 

4. 

6. 

9. 
11. 

6. 

9. 
11. 
14. 
11. 
15. 
18. 



$2.39 



.81 
2.07 
3.34 



$1.41 



76 
37 
98 
76 
72 
67 
63 
54 
84 
14 
44 
61 
26 
90 
55 
96 
30 
63 



1. 

3. 

4. 

1. 

3. 

5. 

7. 

3. 

5. 

8. 
10. 

5. 

8. 
10. 
13. 
10. 
14. 
17. 
20. 



2.42 



67 

28 
89 
67 
62 
58 
53 
45 
75 
05 



2. 
3. 

2. 
4. 
6. 

4. 

7. 



35 9. 
52 



54 

87 



2013 



30 
91 

65 
60 

56 

77 
07 
37 

19 
83 
48 
89 
23 
56 



$0. 
2. 



98 
59 



2ix| 



3. 
5. 

3. 
5. 

8. 

5. 

8. 
11. 

8. 
11. 
15. 
90118. 



39 

35 

45 
75 
05 



S4.20 



4.60 
6.90 



4.72 
7.36 
10.01 
57! 7.42 
9010.75 



87 
51 
16 



24 
57 



14.09 
17.42 



m 



M 



mtm 



FABM-MACHINEBY TRADE ASSOCIATIONS. 
Net extra charge for odd or wide Wrc«— Continued. 

LIGHT OKE HORSE WAGONS. 



Bcgolar Tim. 4V 


mi 


im 


U»A 


llxl 


Regular Tires. 49" 


l|xi 


IJXJ 


IJXA 


Ijxl 


TivUxi 


81.27 
1.67 
2.07 


ti.oe 

1.50 
1.90 


10.00 
1.00 
1.60 


80.58 

.81 

1.00 


Foraix} 


S3. 80 
5.06 


83.62 
4.80 


13.22 
4.49 


82.82 


«« i|xl 


" 3 x| 


4.06 


* 2 xi... 











ADDfw mA H**c* TMcknem Extm on IH^ Om Bone Wagon», 

Tir«2 tn. wide 81.2 

« 3^ " " 1.6 

u % u u 1.9 

NOTKX— The sizes of tires at ttM top of thesecolomns arecommon narrow tires r^ilarly used, while those 
Id the extreme left column are the tires likely to be called for. The prices herein given are recommended 
as net prices to the trade (see secretary's report of meeting, March 14, 1907) and should be the net basis for 
your price list. The prices givea are for tires oa Iiigh or staadard wheels; no reductioa (o be made on 
wheels of less height. 




Exhibit 16. 

n OB «BEPAIB'' FBICE LIST SUGGESTED BY SPECIAL 
COMMITTEE APPOINTED AT CONFERENCE OF FARM WAGON 
MANTJFACTT7BEBS, AT CHICAGO, JTTNE 5TH, 1912— 3i" x 10" 
WAGON. 

(Numbeis 1, 2, 3, 4, 5, 6 represent the rtoa Usts of prominent concerns. The discounts shown are 
those commonly given to the retail deuer. 8«e "NoUoe," below, for further explanation of tliis price* 
list.) 



Liai. Axle, wood only. 
N«t Do 



Lilt. Axle, finished with C. 8. 
N«t Do 



List. B<dsters, wood only.. 
Net. Do 



List. Boistera, finished, finmt. 
Nut Do 



List. Bolstos, finished, hind. 
Net Do 



List Clevises, with pfaa.. 
Net Do 



List Doubletrees, finished. 
Net Do 



List Gears, f^ont, with C. 8. 
Net Do 



40% 



List Gears, hind, with C. 8. 
Net. Do 



List 8q. Hounds, (rant, wood only, R. & L . 
Net Do 



List Sq. Hounds, hind, wood only, R. A L, 
Met Do 



LM. Hounds, pde wood only R. & L. 
Net Do 



MM. 



"^ 



Belli. 



S3.50 
2.10 

5.85 
3.41 

2.35 
1.41 

5.25 
3.15 

4.25 
2.55 

.30 
.18 

1.60 
.96 

17.50 
10.50 

16.60 
9.96 

.90 
.54 

1.25 
.76 

.80 
.48 

.80 



2 

50% 



13.88 
1.99 

7.40 
3.70 

2.44 
1.22 

6.00 
2.50 

5.00 
2.50 

.25 
.13 

1.80 
.90 

27.88 
13.04 

21.48 
10.74 

1.06 
.64 

1.32 
.00 

.00 
.30 

.60 



3 

40% 



82.50 
1.50 

5.00 
3.00 

1.60 
.90 

3.85 
2.31 

3.30 
1.98 

.22 
.13 

.88 
.63 

13.55 
8.13 

13.45 
8.07 

.64 
.38 

.92 
.55 

.64 
.32 

.40 



83.10 
2.01 

5.65 
3.07 

1.70 
1.11 

3.25 
2.U 

3.25 
2.11 

.25 

.16 

1.00 
.65 

17. 00 
11. C5 

14.50 
9.42 

.90 
.60 

.80 
.62 

.60 
.39 

.25 



5 

«% 



83.50 
2.10 

6.00 
3.60 

1.90 
1.14 

4.60 
2.76 

3.80 
2.28 

.30 
.18 

1.50 
.00 

1?.00 
9.81 

12.00 
9.06 

.80 
.48 

1.20 
.72 

.60 
.36 

.30 
.IS 



6 

33J% 



Recom- 
mended 
Gross 
List 



13.00 
2.00 

6.32 
4.21 

1.70 
1.13 

3.90 
2.60 

3.20 
2.13 

.50 
.33 

LOO 
.66 

12.50 
8.33 

11.60 
7.66 

.80 
.53 

1.00 
.66 

.40 
.27 

.40 
.27 


83.80 


7.00 


2.45 


5.00 


5.0O 


.30 


LOO 


25.00 


21.00 


LOS 


L25 


.00 


,m 



# f • 



# 



EXHIBITS, 



**JSiXtra " or " repair " price Ust suggested, etc. — Continued. 



273 



List. 
Net 

List. 
Net 

List. 

Net 

List. 

Net. 

List. 
Net 

T 
X/iSt. 

Net 

List. 

Net 

List. 
Net. 

List. 
Net. 

List. 
Net 

List. 
Net 

List. 
Net. 

List. 
Net 

List 
Net. 

List 
Net 

List. 

Net. 



Neck yokes, 42'', complete 
Do 



Reaches, regular 9'. 
Do 



Reaches, regular 12'. 
Do 



Reaches, regular 14'. 
Do 



Skeins, cast, boxes and nuts, sets. 
Do 



Sandboard, wood only. 
Do 



Singletrees, with ferrules. 



■^ 



Tongues, complete. 



«% 



Wrenches. 
Do... 



Steel Skeins, with boxes. 
Do 



Set 44/52 Wheels, Hxf. 
Do 



Set 44/52 C. S. Wheels, U x ^. 
Do 



Stiff Pole, comp. finished. 
Do 



Stiff Pole, wood only. 
Do 



Stake, ironed. 
Do , 



Stake, wood only. 
Do 



8L50 
.90 

2.30 
1.3S 

3.55 
2.13 

3.90 
2.34 

7.50 
4.50 

L75 
L05 

L15 



7.05 
4.23 

.20 
.12 



2 

50% 



50.80 



81-68 

.84 

3.20 
1.60 

3.56 
1.78 

4.72 
2.36 

8.84 
4.42 

L64 
.82 

1.24 
.62 

7.60 
3.80 

(not 
given) 



3 

40% 



54.57 



81.18 
.71 

2.52 
L51 

3.30 
1.98 

3.30 
1.98 

5.94 
3.56 

L61 
.07 

.92 
.55 

6.30 
3.78 

.44 
.26 



4 
35% 



42.00 



81.15 
.75 

2.50 
1.63 

3.25 
2.11 

3.50 
2.28 

7.50 
3.38 

L40 
.91 

.75 
.49 

5.50 
3.58 

.30 
.20 

7.50 
4.8S 

42.00 
27.30 



5 

«% 



6.00 
3.90 

4.00 
2.60 

.60 
.39 

.25 
.16 



81-60 
.96 

2.30 
1.38 

3.60 
2.16 

5.40 
3.24 

5.80 
3.48 

1.60 
.96 

1.20 
.72 

7.00 
4.20 

.40 
.24 

10-80 
6.48 

35.50 
26.66 

35.00 
26.25 

8.50 
5.10 

3.50 
2.10 

.70 
.42 

.30 

.18 



6 

33J% 



81.30 
.87 

2.30 
1.53 

2.80 
L87 

3.30 
2.20 

5.04 
3.36 

1.60 
1.07 

1.00 
.66 

6.50 
4.33 

.40 
.27 



42.00 



Recom- 
mended 
Gross 
List. 



11.65 



3.00 
3.50 



4.50 
8.80 



L70 

1.25 



7.80 

.40 

15.00 



54.00 



7.ao 



4.50 
.60 
.24 



NOTICE. 



The need of a uniform gross list for extra or repair parts for 
Farm Wagons has been manifest for many years, and at a representa- 
tive meeting of manufacturers in this line held at Chicago on June 
5th, 1912, a Committee was appointed to recommend the proper 
basis for such a list. Their labors were confined to the 3J"xlO" 
size, commonly used throughout the middle west, and they present 
below ^ a suggested list and recommendation on all common parts. 

The first six columns of this list contain the present list prices of 
as many leading concerns in the Farm Wagon line, and the discount 
appearmg at the head of these columns are those commonly extended 
by them to the retail dealer f . o. b. cars factory, subject only to the 
usual cash discount in addition. 

The list recommended by this Committee is that found in the 
extreme right hand column, which, if discounted 50%, would result 
in net prices covering costs of production and sale and netting on 



t*' 



•—15 ^18 



> See list above. 



274 



FABM-MACHINEBY TBADE ASSOCIATIONS. 



average costs a fair margin. The Committee does not recommend, 
however, the application of a discount of 50% or any other discount, 
but does suggest the advisability of adopting the figures shown in 
that column as a gross list by all manufacturers just the same as such 
lists are used for Dolts, screws, nuts and other materials consumed in 
manufacture. It is recommended that a special list be made up for 
Mauntam Wagon Parts^ using the gross list presented on the reverse 
side of this sheet * as a basis and adding 30 to 40 per cent, to those 
figures to make the new list — this will enable the quoting of a 
uniform trade discoimt applicable to both lists. 

The proper discount to apply should be determined after an 
investigation of one's own cost in the regular way. The widelv 
differing lists of the several concerns shown in this report are a suf- 
ficient illustration of the need of a uniform list, especially as the com- 
mon parts referred to in the lists may be furnished by any concern in 
the business and have very little in individuality, form or shape to 
jiisfcify the wide difference often found in these lists. 

Farm Wagon Department 
National Implement and Vehicle Association, 

Chicack), III., November 26y 191£. 



Exhibit 17. 

PAVEB OS STAITDABDIZATION 07 FABM WAGONS, BEAD BEFOBE 
AMEBICAN SOCIETY OF AGBICTJLTTTBAL ENGINEEBS BY E. E. 
7ABSONAOE, OF JOHN DEEBE WAGON CO., DECEMBEB 30, 1913. 

(Approved by Wagon Department of National Implement & Vehicle Anodatton.) 

Gentlemen : As you probably understand from the nature of my 
business, I am vastly interested in the subject you have assigned me. 

Manufacturers of farm implements in recent years have very 
largely adopted steel construction. Wagons, however, of necessity 
are built very largely of wood, and standardization of farm wagons 
will tend toward economy in the use of wood stock. We are there- 
fore all interested in the conservation of our forests. 

As an advance step, the wagon manufacturers have done a great 
deal toward standardizing wheel heights, and we have a set of 
National Construction Rules governing the grading of wood stock. 
Wagon axles, poles, etc., are standardized as to raw sizes, whereas in 
times gone by each manufacturer had his own patterns, and the mills 
were forced to cut accordingly, and the waste was large as a result. 

W« have now come to a point where, in order to further standardize 
farm wagon construction, it is necessary to get the co-operation of 
the consumers. 

I have some definite ideas that I will present, and I am myself posi- 
tive that they will result in great benefit to the manufacturer of 
wagons, the merchant who handles them, and the farmer who uses 
them, finally. At least, I hope to outline a plan that may serve as a 
nucleus in attempting to remedy the ridiculous situation that now 
exists in the wagon trade. 

^ See list above. 



^m» 



^% 



f* 



EXHIBITS. 



276 



Let me start with the statement that by reason of all wagon 
factories being compelled to cater to the individual ideas of wagon 
users in all sections of the country, an ordinary farm wagon is cost- 
ing the manufacturer, and consequently the farmer, several dollars 
more per unit than would be the case if farm wagons could be classi- 
fied and built more with the idea of fitting the conditions from a 
practical standpoint. 

In other words, gentlemen, wherever the manufacturer of any 
staiidard article of trade has studied the needs of the consumer and 
built a line of goods to meet those needs in every practical way, and 
has not listened to the whims and fancies of the purchaser as have the 
wagon builders, the needs of the consumer are better supplied, and 
greater efficiency in manufacturing is maintained. The farm wagon 
of today is strictly a freight vehicle and its purpose is to haul farm 
loads. Therefore, its use in practically all the country is precisely 
the same, and there is no more real need of the very large variety of 
construction and sizes than there is in watches, or any other article 
of universal use. 

Why, then, should wagons be made and marketed, in any given 
localitv, with the idea of furnishing the merchant anything and 
everything he thinks he wants— regardless of its adaptability from 
a practical standpoint, and regardless of the effect upon the roads of 
the various styles of tire equipment, etc. ? In this one particular, I 
take it that you are all vitally interested in the tire equipment of 
wagons, based upon approximate loads, and of such widths as will 
insure the conserving of the roadbed, rather than the destruction of 
it through ignorance. 

As an example, I have with me an order, copy of which reads as 
follows : 



Amt. 



1. 
1. 

3. 
2. 

3. 
2, 
3. 
3. 



Size. 



2 

2 



2. 
2. 



3|xll 
3|xl0 

3ixl0 
3ixl0 

3x9 
3x9 
3x9 
3x9 

2ix84 
2fx8| 
2|x8| 

3x9 



Kind. 



lix 



1132 
1130 

1130 
1130 

1128 
1128 
1128 
1128 

1126 

126 

1126 

128 

418 
418 



Wheels. Tires. 



40/44 
40/44 

40/44 
40/44 

40/44 
40/44 
40/44 
40/44 

40/44 
44/52 
40/44 

44/52 

40/48 
40/48 



3 x|RE. 
3 x|RE. 

2 xj RE . 
2 x|R£. 

2 xfRE. 
lixfRE. 
2 xf RE. 
lixfRE . 

IJxf RE . 
lixf RE . 
lixf RE . 

lixf RE . 



l}xA. 
lixA- 



Remarks. 



3x4 reach 12" long. 

8" stakes 48" neckyokes. 

8" stakes 48" neckyokes. 

8" " 48" '• 

8" stakes 42" neckyokes. 
10" " 42" " 

8" " 42" «* 

10" " 42" " 



10" " 42" 
12" " 42" 
10" " 42" 



« 



12" 



42" 



Please note that this is an order for a carload of 30 wagons, and it 
includes 14 different varieties. This is a condition that is nothing 
short of ridiculous. 

In order to lay a foundation in a measure, that I am about to 
recommend, let me go over the sizes of standard 2-horse farm wagons, 
as designated by skein measurements. They are as follows: 

2fx7 2ix8 2ix8i 3x9 3^x10 3^x11 3} x 12 4x12 



I I I! W i i p 



« 






276 FABM-MACHINEKY TBADE ASSOCIATIONS. 

Bear in mind that practically each of these eight classes of wagons 
is built in all sorts of eauipments— different heights of bolster stakes, 
wide track, narrow track, wide track narrow bed, slip pole, drop pole, 
36/44 wheels, 40/44, 40/48 and 44/52 heights of wheels. 

Now let us take the 3J x 10 wagon. This is the size of wagon that 
sells regularly in the central states from Ohio to the Wyoming and 
Colorado lines. 

Kindly mark this statement: If a large wagon factory to-day 
should have on hand in the 3J x 10 size of wagon only, one each of 
all the styles and forms of equipment demanded in various parts of 
the country, and that they might be certain of being able to ship any 
particular equipment within an hour's notice, they would have to 
have on hand — 

640 different styles of gears. . 

157 different sets of wheels with various heights and tire 

widths. 
140 different styles of wagon boxes. 

This is a condition that is appalling; and these figures will hardly 
be believed by the wagon manufacturer himself, unless he spends a 
week or more tabulating the various equipment he is compelled to 

furnish. 
I have in mind four avenues of standardization, viz : 
First— Standardizing and Simplifying the Sizes of Wagons. 
Second— Standardizing the Track of Wagons. 
Third— Standardizing and Simplifying Wheel Heights. 
Fourth— Standardizing Tire Widths and Thicknesses. 

FIRSl^-STANDAKDIZING, OR IN REAMTY, REDUCING THE NUMBER OF SIZES 

OP WAGONS. 

For instance, a 2J x 8 and a 2i x 81—2 horse wagons. In reaUty, 
it takes an expert to tell the difference in these two wagons. Dif- 
ference in carrying capacity is barely nominal, as there is only from 
35 to 50 lbs. difference in the weight of these wagons. The box 
equipment, pole, axles— are the same. One wagon would take the 
place of these two, were it not for the fact that— first, the salesman 
is educated to sell both sizes— the merchant thinks he needs both 
sizes, and buys them— and in turn asks the farmer which of the two 
sizes he wants. If the implement man happens to have on hand a 
21 X 8 wagon, he sells that. If he has the other size, that sells equally 

as well, as a rule. 

Now we have eight sizes of two-hors© wagons. Suppose we re- 
move the incentive for the purchaser of a farm wagon asking the 
measurements of the skein of the wagon he is going to buy. Sup- 
pose we forget the size of the skein entirely. A farmer comes to 
town. He wants a light 2-horse wagon, or he wants a medium 2-horse 

^ippose we recommend that four sizes of 2-horse wagons be 
bought, instead of eight, designating them as follows : 

light 2-borse Wagon «Qa»J» standard 2| x a 

Medium 2-horse Wagon equals 3 x 9. 

Standard 2-hor8e Wagon equals 3i x 10. 

Heavy 2-hor8e wagon, such as is used far teaming 
work, logging, hauling wood, etc equals 3i z 12. 



EXHIBITS. 



277 



Vl 



Results — The manufacturer of wagons would gain materially by 
such an arrangement. Jobbing trade and merchants generally would 
gain for the same reason that the manufacturer would be the 
gainer — and that is, their stocks would be simplified — ^they would 
need to carry less stock in order to supply their trade, and a big in- 
centive would be removed for the user of a wagon to buy other than 
the wagon that would be fitted for his needs. 

This, I think, could be brought out by concerted action, details 
of which I will discuss later. 

SECOND — STANDARDIZING THE TRACK OF WAGONS. 

There is no necessity or value in the variation in the track of 
wagons, and in fact, the variation in track widths is a positive detri- 
ment, an inconvenience in many sections of the country, and is simply 
brought about by one of two reasons. 

I might say to start with, that there are no less than one-half 
dozen widths of track in the United States, although the common 
variation is the difference between the Narrow Track and the Wide 
Track— viz: Narrow Track, 4' 6" center to center, and Wide Track 
6' center to center. 

The variation in the track of wagons has been brought about in 
years gone by from one or two reasons, principally. 

First — a local wagon maker, in many sections, would have a track 
figured out of his own, and he would set the pace in his particular 
neighborhood. 

The other reason for maintaining a wide or narrow track in any 
one neighborhood has been simply the so-called necessity of each 
farmer buying his new wagon of a track that would fit the ruts made 
by his neighbors. 

There can be no objection made to standardizing the tracks to 
conform to the standard narrow — 4' 6" center to center. The wide 
track wagons naturalljr carry longer axles — therefore, with a maxi- 
mum load on a given size of wagon, the wagon will stand up longer 
and stand more hard usage by having a narrow track axle. 

It may seem ridiculous to tell you that there are towns in several 
of the states where an implement man is forced to carry both wide 
and narrow track wagons — selling wide track east of his town, and 
narrow track west of his town. 

The necessity for following the custom as far as track is concerned 
in any given territory is becoming less and less as the country roads 
are becoming better. As roads are built up, rounded up, MacAdamed, 
drained, etc., the ruts forming even at the worst time of the year, are 
becoming less noticeable. 

As a practical example — seven or eight years ago in California, all 
tracks of gears were demanded, and each small valley or community 
had its distinctive track. Thru the efforts of the National Associa- 
tion of Wagon Manufacturers and the implement men generally in 
that territory, the complicated situation was changed, and now in 
California no other wagon is sold than the regular Wide Track 
6-foot width. 

Another example is that in the southern part of our own state, for 
many years there was a 6' 1" track in use. This old track has been 



I 



278 



FABM-MACHINEBY TRADE ASSOGIATEOKS. 



EXHIBITS. 



279 



I 



eliminated by several of the larger manufacturers who did business 
in that territory, refusing to build 5' 1" track. 

I have a plan for bringing it about which I will go into later for 
standardizing track. 

THIBD — STAKDAROIZINQ AND SIMPLIFYING AliL WHEEL HEIGHTS. 

Until comparatively few years ago, there were more different wheel 
heights in wagon wheels than could be counted on the fingers of 
both hands; in fact — ^there were forty-one different heights. Thru 
the efforts of the Wagon Manufacturers Association several years 
ago, an. attempt was made to simplify wheel heights, by naming 
four heights, viz : 

36/44 40/44 40/48 44/52 

This attempt at reducing the wheel heights to four standard sizes 
has been very nearly successful. There are some exceptions, how- 
ever, owing to one or more manufacturers not having the heart to 
refuse building all heights of wheels because of the fear of losing 
a little trade. There is one manufacturer that even at the present 
time, makes a 54" rear wheel. 

For the past vear, ouf Wagon Association has agitated a reduction 
in the height of wagon wheels. 

There is a consensus of opinion that there is no longer any necessity 
for building a 44/52 wheel height. The reasons for this assumption 
can be summed up as follows : 

First — ^wagon spokes are mostly sawed to equip 44/52 wheels. 
When 36/44 wheels are used, or smy other height, from 2 to 4 inches 
of each spoke is wasted and thrown into the scrap pile. 

Tn the interests of conservation of wagon stock, elimination of the 
44/52 wheel height is advisable. 

Again — the higher the wheel, the greater the strain on the axle and 
wheel also. It may be interesting to some of us to know that strain 
or breakage on a wagon wheel or axle is not brought about by the 
downward pressure of the load, but axles are broken and wagon 
wheels are crushed, in 99 cases out of 100, by reason of the side play 
or shifting of the load sideways. 

For instance, a medium 2-horse wagon may be carrying a load of 
3000 lbs. If the road were good and level, the wagon could be loaded 
up to 5000 lbs., or 6000 lbs., without injuring it, but with a 3000-lb. 
load, one wheel drops sideways from the top of .a stone; result — a 
smashed wheel or broken axle. 

My. proposal then, is to make the 40/48 wheel height the standard 
high wheel construction. Wherever the 40/48 height of wheel has 
been standard, it has taken the place entirely of the 44/52 height. 

Objection has been made that the 40/48*^ pulls harder than the 
44/52. In answer, there is only a 10 per cent, reduction in height of 
wheels, and tests show even under extreme conditions only a 2 per 
cent difference in draft. Under ordinary road conditions the differ- 
ence in draft is not readable on a dynamometer. 

The only other possible objection to the elimination of the old 
style high wheel is that in stump countries, as in Arkansas and 



4l# 



w 



Eastern Texas, the stumps are so high as to interfere with the front 
axle when using only 40" front wheels. 

The difference in the heights of the front axle from the ground 
as between 40" and 44" front wheels is only 2 inches, the 40" con- 
struction having 18" and 19" clearance. This so called medium 
height wheel wagon has taken well in the rough sections of the states 
mentioned, and a little education will wipe out these fancied objec- 
tions. 

Furthermore, with the 40/48 wheel height the wagon box is lower, 
closer to the ground, and easier to load into. 

Then — 40/44 as medium height, which is largely used in the East 
and South. 

Then 36/44 as low wheel construction. 

FOURTH — STANDARDIZING TIKE WIDTHS AND THICKNESSES. 

This last proposition is, I believe, of more vital interest to your 
Honorable Body than the sections preceding this. I take this to 
be a fact, because you all necessarily would be interested in good 
road building and road preservation. 

Therefore, a sane, simple standardization of wagon tire widths, 
based on various sizes of wagons and according to the maximum 
size of load carried by the average wagon, is of vast importance. 

At the present time, there are over 50 different widths and thick- 
nesses of tires demanded on the various heights of wheels and on 
various sizes of wagons. The result is that a wagon factory catering 
to the trade in various parts of the country, is compelled to carry 
many hundreds of different sets of wheels in order to supply the 
demands. This wheel situation alone is little short of ridiculous. 

Farmers throughout the country have clung to the narrow tire 
because of the deep ruts in the road made by the other fellow's 
wagons having narrow tires, and when a farmer comes to buy a new 
wagon, he dare not buy a 3" tire wagon because four horses couldn't 
pull the wide tire wagon when the wheels got down into ruts with 
narrow bottoms made by narrow tire wagons. 

I take it from the sentiment of those interested in better roads 
lies entirely in recommending and forcing the use of wide tires. 
Therefore, I have the following table to suggest as a standard tire 
equipment. 



Wood Axle w/Cast 
or Steel Skein. 


Size. 


SoUd Steel 
Axles, Size. 


Tubnlar 
or Hollow 
Axles, Size. 


Width of Tire. 




/2-1/8" 

\2i" 

/2-3/8" .- 


1-1/8" 




These sizes to have tire IJ" wide. 


1 Horse 


li'( 


1-5/8" 

1-3/8".... 

1-7/8" 

2" 


These sizes to have tire 2" wide. 
These sizes to have tire 2" wide. 




Light 2-horse 


\24''. 

/2|" 

3^' 


1-3/8" 

i¥'. 

1-5/8" 

ir- 

2^' 


These siz^s to have tire 2" wide. 
These sizes to have tire 2^" wide. 
These sizes to have tire 3" wide. 


Medium 2-horse 


2-1/8" 

2-3/8" 

2-5/8" 

2-7/8" 

3-1/8" 


Standard 2-horse.. - 


rsj" 

3" 

4 ' 


These sizes to have tire 3" wide. 
These sizes to have tire 4" wide. 


Heavy 2-hor8e 


2J" 

2-3/8" 

2i" 


These sizes to have tire 4" wide. 
These sizes to have tire 4" wide. 


n" 

Ui" 


These sizes to have tire 5" wide. 




2-5/8" 




These sizes to have tire 5" wide. 











•A<i 



280 



FAEM-MACHINEBY TBADE ASSOCIATIONS. 



EXHIBITS. 



281 



>l 






i 



At the present time, something over 45 various thicknesses of tire 
are required. Some of the differences in the thicknesses are so small 
that it takes an expert to tell the difference between the tires. As an 
mstance, the difference between 9/16" and 5/8" thicknesses is l/16th 
of an inch. This difference is so trifling that an expert handling a 
dozen wheels, six of 9/16" and six of 5/8" thickness, absolutely can- 
not tell them apart after he has handled the first two of the twelve. 

Then again, on a 1^" tire alone, we are required to build wheels 
of various heights and in the various thicknesses. 

li X 3/8 11 z 5/8 1| z i li z I Hz 9/16 

Now as to the various thicknesses of tire. On wide tire wagons 
8/8" and |" thickness should be the rule ; that is, on light wagons 
carrying tires from 1^" to 2^" in width. On the 3, 4 and 5 in. tires, 
I would recommend 3/8 in. for soft roads or trucks used on the farm 
ordy; 1/2 in. thicknesses for ordinary road conditions and 5/8 or 
3/4 in. thickness for rough sections where rock is encountered in the 
roads, Mac Adam, etc. 

BEGOMMENDATIONS AS TO METHODS FOR BRINGING ABOUT STANDARDIZA- 
TION OF WAGON EQUIPMENT. 

The consensus of opinion seems to be that we should have uniform 
wide tire laws passed by the various State Legislatures. If we can 
arrive at some decision as to what we want and what is needed ; then 
remains simply the problem of best reaching those men who have it 
in their power to pass this uniform tire law. 

We have all noticed that the various states are passing wide tire 
laws, and every law is at variance with every other law. 

I think what is needed is a plan worked out definitely whereby each 
size of wagon now in use shall be equipped with a tire sufficiently 
wide to carry a maximum load without injuring the road bed. Such 
a table, coupled with a road law worded as would be approved by the 
Eoad Engineers connected with the various Agricultural Colleges 
and backed by your Society, would meet the approval of every body 
of Legislators in every State. It is no criticism of our law makers 
to state that they have in the past, in many cases, voted blindly for 
road laws because they have no guide and have not understood just 
what was needed to better preserve the road bed. 

If laws are made in the various states with definite similarity as 
to wording and forced equipment of tire widths, farmers will buy 
wide tire wagons accordingly, and soon change the road conditions 
for the better. 

I would like to say that the Manufacturer has no selfish interest in 
forcing wide tires in place of narrow tires, as he would just as soon 
build one as the other. However, we are all interested in simplify- 
ing the variety and we have of course a big interest in road better- 
ment. In other words, we have no axe to grind in connection with 
the changing of tire widths, other than simplification. 

The Wagon Manufacturers, Implement Men and Jobbers are 
vitally interested in the other lorms of standardization and simpli- 
fication as described. The CJonsumer would be assured of a better 



4 



V 



product in the wagon he buys, and he will, by co-operating with the 
manufacturer, obviate the necessity for very large increases in the 
cost of wagons within the next year or two. Farm wagons cannot 
be long made under the job shop plan now existing without the neces- 
sity of having to materially increase prices to the consumer. 

1 believe that there is only one sane basis upon which to start an 
agitation working toward the standardization described; viz: To 
create such a sentiment in various ways as will bring the Public gen- 
erally to an appreciation of what is to be gained. A great deal of 
good can be done by your Honorable Body backing and recommend- 
ing standardization along the lines described — or with such changes 
and additions as you may see fit to recommend. The various Agri- 
cultural Colleges can do a great deal. 

The Farm Papers can be enlisted in our favor. I believe they 
will cheerfully publish any matter that is given to them along these, 
lines. 

Then, I think that a definite plan should be laid out and published 
through various channels, copies forwarded to the Legislators of 
our various states, and copies sent to all Road Commissioners, enlist- 
ing their efforts. 

In turn, the National Wagon Makers Association could get back 
of a plan and pass resolutions agreeing that after certain dates, 
certain changes in simplification and standardization be adopted at 
all wagon factories. 

In turn, the various wagon factories, through their traveling sales- 
men and jobbers, could carry on a definite campaign with the trade 
and farmers generally, working toward the same results. 

There is no question in my mind but that every man in this coun- 
try, regardless of whether he live in a town or in the country, is in- 
terested in better roads. The automobile people are wise in consist- 
ently refusing to build anything but narrow track, and they have 
been able to hold to one track. 

Wide tires on all wagons will mean better roads, the hauling of 
heavier loads with less horse power, less wear and tear on the wagon, 
team and equipment, besides saving of time required to market the 
farmer's product. This matter of time alone is getting to be a tre- 
mendous factor to the farmer, owing to the scarcity and the high 
price of farm labor. 

I think I can speak very decidedly for the Wagon Manufacturers 
in saying that they will be willing and anxious to co-operate with 
this Body to bring about results that cannot help but be of vast bene- 
fit to the country as a whole. 

In conclusion, will say I would be very glad to have your sugges- 
tions and criticisms. In speaking for the Wagon Manufacturers as 
a whole, I think I would be safe in saying that our interests and the 
interests of the consumer are so nearly identical that they would be 
willing and glad to co-operate for the standardization plan that will 
work to the greatest benefit of all concerned. 



I 



II 



I 



ll 



282 



FARM-MACHINERY TRADE ASSOCIATIONS. 

Exhibit 18. 



BECOMMEITBATIOKS OF THE NATIOWAL PLOW ASSOCIATION TO 
ITS MEMBEBS BEGABDING LIST FBICES, STAKDABD SPECIFICA- 
TIONS, EQUIPMENT, ETC., 1907-1909. 

To the members cf the National Plow Association: 

This booklet contains the list prices of Walking Plows, Extra 
Shares and Lever Harrows; also standard equipment for all Imple- 
ments recommended by the Association since its organization, viz : 
[Index to booklet omitted.] 

None of the within recommendations are intended in any way to 
regulate the net selling prices. 
Respectfully, yours, 

Charles E. Sanders, Secretary/, 

Sums No. 525 American Trust Bldg., 

Chicago, June 21, 1909. 



LIST PRICES or WALKING PLOWS. 



Beoommendsd Mat 8, 1907. 



BTUBBLI SEKIES. 



Steel Beam, Medium Landside, Double Shin, Soft Center Mould, 
and Slip Share. 

12 in flT. 00 I 16 In $21. 50 

14 in 19.00 I 18 In 



25.00 



STUBBLE SERIES. 



Steel Beam, Low Landside, Double Shm, Soft Center Mould, and 

Slip Share. 

12 In $17. 00 I 16 In $21. 50 

14111 19. 00 I 18 in 



25.00 



TUET AHD BTUBBOE SEBIE8. 



Steel Beam, Medium Landside, Double Shin, Soft Center Mould, 
uid Slip Share. 



12 in $18. 00 

13 !n 10. 00 

14 in..: 20. 00 



16 in $22. 50 

18 in 26. 00 



TUBF AND STUBBLE SEBTE8. 

Steel Beam, Low Landside, Double Shin, Soft Center Mould, and 
Slip Share, 

i2in $18.00 16 in — $22.50 

13 In 19. CO 18 in 26. 00 

14 in - — 20. 00 

It is recommended that the 13 in., 15 in. and 17 in. in the Stubble 
Series, both steel and wood beam, be dropped, and that the 16 in. 



1 1 



^ ! • 



'**! * 



^1* 



EXHIBITS. 



283 



and 17 in. in the Turf and Stubble Series, steel and wood beam, be 
dropped, also Upset or Single Shin Plows in both the Stubble and 
Turi and Stubble Series, be dropped from the list. 



MIXED LAND — ^BLUE SEBIES. 



Steel Beam, Soft Center Mould, Crucible Share and Landside, 
Double Shin, Slip Heel, Medium Landside, with Extra Crucible 
Share. 



7to. 

.8 in. 

9in. 

10 in 



Northern 
list. 



SIO.OO 
11.00 
12.50 
14.50 



Southern 
list. 



$12.50 
14.00 
15.50 
17.00 



11 in 

12 in 
14 in 
16 in 



Northwn 
list. 



$15.75 
17.00 
19.75 
22.50 



Southern 
list. 



$19.00 
21.50 
24.50 
27.00* 



MIXED LAND — BLUE SEBIES. 



Steel Beam, Solid Mould, Crucible Share and Landside, Double 
Shin, Slip Heel with Extra Crucible Share. 





Northern 
list. 


Southern 
list. 




Northern 
list. 


Southern 
list. 


7In 


$9.00 
10.00 
11.50 
13.50 


$11.50 
13.00 
14.50 
16.00 


11 in 


$14. 75 
16.00 
18.50 
2L25 


$18.00 
20 50 


Sin 


12 in 


91n 


14in 


23 25 


10 in 


16in 


25.75 







N. B. — ^The above 7-inch — Northern List — were reduced from $11.00 
and $10.00 to $10.00 and $9.00 respectively, April 30, 1909. 



BLACK LAND SEBIES. 



Steel Beam, Soft Center Mould, Wrought Frog, Crucible Slip 
Share and Landside, Single Shin, with Extra Crucible Share. 



Southern List Only. 

6 in $10. 50 

7 in 11. 50 

8 in 13. 00 

9 In 14. 50 

10 in 16. 00 



Southern List Only. 

11 in $18. 00 

12 in 20. 50 

13 in 22. 00 

14 in 23. 50 



BANDY LAND SEBIES. 



Steel Beam, Soft Center Mould, Wrought Frog, Crucible Slip 
Share and Landside, with Extra Crucible Share. 



Southern List Only. 

7 in $11. 00 

8 in 12. 50 

9 in 14. 00 

10 in 15. 50 



Southern List Only, 

11 in $17.00 

12 in 18. 50 

14 in 22. 50 

16 in 25. 00 



WOOD BEAM PLOWS. 



It is recommended that the list price on Wood Beam Plows in the 
Stubble, Turf and Stubble, Mixed Land, Black Land, Sandy Land 



Ill 



PI 



l! 



284 



FARM-MACHINEBT TRADE AfiSOCUTIOKS. 



fts listed above, be listed $1.00 each over Steel Beam, up to and in- 
cliiding 11 in., and ^.00 for 12 in. and above. 

On Railroad and Township Plows add $3.00 each to the list prices 
yon are now using. 

WOOD OB STEEL STAITDABD OB HAZEL TIAWS — STUBBLE SEBIE8. 

Wood Beam, Soft Center Mould, Wood or Steel Standard, Solid 
Bar Share, Iron Strap imder Beam with Quincy or Reversible Coul- 
ter with Clamp. 

13 In : $19.60 

14 in 20.60 

16 in 23.60 



10 In 116.60 

11 in 17.60 

12 in 18.60 



WOOD OB STEEL 8TANDABD OB BASEL PLOWS — TUBF AND STUBBLE SEBIES. 

Wood Beam, Soft Center Mould, Wood or Steel Standard, Solid 
Bar Share, Iron Strap under Beam with Quincy or Reversible Coul- 
ter with Clamp. 

10 in $16.60 13 in $19.60 

11 in 17.60 14 in 20.60 

12 in 1& 60 1 16 in 1 23. 60 

Add $1.00 to the above list prices on each size for Beam Strapped 
top and bottom. 

BAB 8HABE PLOWS — STUBBLE SEBIES. 

Steel Beam, Low Landside, Double Shin, Soft Center Mould and 
Share. 

10 in $15.00 

11 in 16.00 

12 in 17.00 



14 in $19.00 

16 In 21.50 



BAB SHABE PLOWS — TUBF AlfD STUBBLE SERIES. 

Steel Beam, Low Landside, Double Shin, Soft Center Mould and 

Share. 

14 in $19.00 

16 in 21.50 



10 in $15.00 

11 in -- 16. 00 

12 in 17.00 



TIlfBEB LAND PLOWS. 



Wood Beam, Soft Center Mould, Malleable or Steel Standard, 
Solid Bar Share, Iron Strap Under Beam, with Quincy Cutter and 
damp. 

11 in.: $18.00 I 14 

12 In 20.00 



$22.00 



Add for Beam Strapped Top and Bottom $1.00 list Extra to above 
sizes. 

COMBIlf ATIOH BASTEBN PLOWS. 

From the Turf and Stubble list shown on page 2 * when equipped 
with cast share and extra cast share deduct from list $1.50 each size. 

> 8m 11.282. 



'^^W 



^' 



EXHIBITS. 



285 



When equipped with cast landside, cast share and extra cast share 
deduct $3.00 each size. 

Recommended Apbil 30, 1909. 

When equipped with cast landside deduct from list 50 cents each 



size. 



MIDDLE BBEAKEBS. 



Steel Beam, Soft Center Mould, Crucible Share, no Extra Share. 



8 in $14.50 

9 in 15.00 

10 in 15.50 



12 in $16.50 

14 in 19.00 

16 in ^ 23.00 



For Solid Mould instead of Soft Center deduct $1.50 from above 
list for corresponding sizes. 



Recommended May 8, 1907. 



PBAIBIE BBEAKEBS. 



Solid Mould, Gauge Wheel, Rolling Coulter, Crucible Slip Share 
and Extra Crucible Share. 



12 in $22. 50 I 16 in. 

14 in 24.50 I 18 in. 



$27. 50 

28. 50 

Add with Soft Center Mould instead of Solid Mould $2.00 list to 
each size. 

Add for Bar Welded Share $2.00 list to each size, in both Solid 
and Soft Center Moulds. 

Deduct $1.00 list when Standing Coulter is substituted for Kolling 
Coulter. 

Deduct if Gauge Wheel not wanted $1.50 list. 

Deduct $2.00 list if Fin Cutter is furnished instead of Rolling 
Coulter. 

BBUSH BBEAKEBS. 

Heavy Long Bar Share, Strap under Beam, Standing Coulter, 
Gauge Wheel, Solid Mould and no Extra Share. 

12 in $25.00 

14 in 27.50 

16 in 30.00 



18 in $33.00 

20 in 37.50 



If Strap under Beam is not furnished deduct $1.00 list each size. 
If Soft Center Mould is furnished add $3.00 list each size. 



WISCONSIN BBEAKEBS. 



Wood Beam, Solid Bar Share, Standing Coulter, Gauge Wheel, 
Solid Mould Board and no Extra Share. 



12 in $30.00 

14 in 31.00 

16 in 34.00 

18 in 38.00 



20 in $42.00 

22 in 46.00 

24 in 49.00 






Ill 






286 



FABM-MACHINEBY TRilDE ASSOCIAnONS. 



U8T PRICKS OF FLOW PABTS. 
Rboommsndbd BiAT 8, 1907. 

KXTBA. BOTTOMB. 



16 in 117. 00 

18 in 19.00 



Extra Bottoms for Stubble and Turf and Stubble Walking and 
Eiding Plo\vs, Soft Center Mould and Share. 

12 in $14.00 

13 In 14.00 

14 in 15.00 

For Crucible Mould Board deduct $1.00 list from each size. For 
Crucible Share deduct 50 cents from each size. 

HM-AKirR BfyrroMs ix>b Biniifo flows, solid mould with extba shabb. 



16 in $17.00 

18 in 19.00 



12 In $14.00 

13 in 14.00 

14 in 15.00 

For Soft Center Mould Board on above add $2.00 list to each size. 

flow fixtubes. 

Pin Cutter and Bolt for Walking Plow $1. 00 List 

Steel Jointer for Walking Plow 2. 50 List 

Chilled Jointer for Walking Plow ^ 2. 00 List 

Combination Steel and Chilled Jointer for Walking Plow 2. 25 List 

No Uniform list price is recommended for the following class of 
plows for the reason tJiere seems to be a varied equipment, and 
weight of same: 



Township Road Plows. 
Railroad Plows. 
Com Plowa 
Rod Breakers. 



Root and New Ground Plows. 
Potato Diggers. 
Chilled Plows. 



LIST PRICES OF HARROWS. 

Recommended Mat 8, 1907. 

It is recommended to place all Steel and Wood Bar Harrows except 
the Boss Harrows on a list price and to quote net prices by using dis- 
count from the list the same as is the common practice in quoting net 
prices on Walking Plows. 

PIPE OB U BAB 5 BAIL STEEL LEVEB HABBOW SECTIONS. 

25 Tooth 5 Bar Section Pipe or U Bar % in. T $6. 25 

25 Tooth 5 Bar Section Pipe or U Bar % in. T 6. 60 

30 Tooth 5 Bar Section Pipe or U Bar ^^ in. T 6. 60 

80 Topth 5 Bar Section Pipe or U Bar % in. T 7. 00 

35 Tooth 5 Bar Section Pipe or U Bar % in. T 7. 30 

35 Tooth 5 Bar Section Pipe or U Bar % in. T 7. 75 

For Bunners add 40 cents per section list. Kevised April, 1908. 
See below. 
For 4 Rail Harrows deduct 40 cents per section list. 
For Adjustable Tooth on Pipe Harrow add 60 cents per section list. 



GUABDED END SPBINQ BELIEF, STEEL LEYEB HABBOW SECTIONS. 



25 Tooth % in. Teeth $6. 60 

25 Tooth % in. Teeth 7.00 

30 Tooth % in. Teeth 7. 00 



30 Tooth % in. Teeth 

35 Tooth ^^ in. Teeth 

36 Tooth % in. Teeth 



$7.40 
7.70 
8. IS 



« 



EXHIBITS. 



287 



A 



For Runners add 40 cents per section list. Revised April, 1908. 
See below. 

For 4 Rail Harrows deduct 40 cents per section list. 

Recommended April 8, 1908. 

Runners. — For Independent or a One-Piece Runner — add, per sec- 
tion list, $0.40. 

For Combination Runner and Tooth or Tooth Socket — charge op- 
tional. 

Relief Springs. — Guarded End Lever Harrows not Equipped with 
Relief Sprmgs, deduct from list prices per section, $0.20. 

Recommended May 8, 1907. 

wood bar 5 RAIL LEVER HARROW SECTIONS — SQUARE OR ZIGZAG OPEN END. 

5 Foot Section, 30 Tooth, % in. Teeth $7 OO 

5 Foot Section, 30 Tooth, % in. Teeth 7.50 

6 Foot Section, 35 Tooth, ^ in. Teeth 7. 70 

6 Foot Section, 35 Tooth, % in. Teeth 8. 25 

5 Foot Section, 40 Tooth, % in. Teeth 7. 50 

5 Foot Section, 40 Tooth, % in. Teeth .__ 8.00 

For Runners add 40 cents per section list. 
For 4 Rail deduct 40 cents per section list. 

WOOD OR STEEL BAR FLEXIBLE 5 RAIL HARROW SECTIONS. 

5 Foot Section, % in. Teeth $7. 50 

6 Foot Section, % in. Teeth ^ 8. 50 

For Runners add 40 cents per section list. 

For 4 Rail Steel Bar deduct $1.00 per section list. 



COMBINATION EYENEBS 4 AND 



4 Foot Evener, 1 Section $0. 90 

6 Foot Evener, 1 Section . 95 

6 Foot Evener, 1 Section 1. 00 

8 Foot Evener, 2 Section 1. 65 

10 Foot Evener, 2 Section 1. 85 

12 Foot Evener, 2 Section_l__ 2. 05 

Recommended April 8, 1908. 

Three and four section eveners. — Consisting of One Long Wood 
Bar and Draft Irons, Complete. 



5 BAR HARROWS, ALL STYLES. 

12 Foot Evener, 3 Section.. 

15 Foot Evener, 3 Section.. 

16 Foot Evener, 4 Section.. 
18 Foot Evener, 3 Section.. 
20 Foot Evener, 4 Section.. 
24 Foot Evener, 4 Section.. 



$3.00 
3.50 
4.50 
4.00 
6.00 
7.00 



75 Tooth Evener, 3 Section— $2. 25 

90 Tooth Evener, 3 Section.. 2. 75 

105 Tooth Evener, 3 Section.. 3. 25 



100 Tooth Evener, 4 Section.. $3. 50 
120 Tooth Evener, 4 Section.. 5. 00 
140 Tooth Evener, 4 Section.. «. 00 



Recommended May 8, 1907. 

steel lever harrows — 5 BAR PIPE OR U-BAR WITH EVENERS. 



r 


Withiin.t«6th. 


With 1 in. teeth. 




Comb. 
Evenw. 


With One 

Piece 
Evener. 


Comb. 
Evener. 


With One 

Piece 
Evener. 


60 Tooth 


$14. 14 
15.05 
16.65 
2L75 
23.30 
29.50 
25.90 
32.40 
36.20 




114.85 
15.85 
17.55 
22.80 
24.50 
30.90 
27.25 
34.00 
38.00 




60 Tooth 






70 Tooth 






75 Tooth 


S21.00 
22.55 
28.50 
25.15 
31.40 
35.20 


$22.05 
23.75 
29.90 
26.50 
33.00 
37.00 


90 Tooth 


100 Tooth 


105 Tooth 


120 Tooth 


liOTooth 





in 



IH 



2g8 FABM-MACHUSBBY TBADE ASSOCIATIONS. 

STEEL LKVEB HA1UI0W»— B BAB GUABDED EHD. 8PBING BELIEF WITH EVENEBS. 



fiO Tooth 

00 Tooth 

TO Tooth... 

75 Tooth 



Wlfii|ln.t8cth. 



Comb. 
Evener. 



fiO Tooth. 
100 Tooth. 
106 Tooth. 
120 Tooth. 
140 Tooth. 



til 85 
15.85 
17.45 
22.80 
24.50 
aOiM 
27.10 
34.00 
37.80 



WIthOn« 

Piec* 
Eycdw. 



With I in. tMth. 



Comb. 
EY«a«r. 



322.05 
23.75 
29.90 
26.35 
33.00 
36.80 



i 



tl5.65 
16.65 
18.35 
24.00 
25.70 
32.50 
28.45 
35.60 
39.60 



With One 

Piec« 
£y«Qer. 



$23.25 
24.95 
31.50 
27.70 
34.60 
38.60 



WOOD BAIL LEVEB HABBOWB. S BA»-8QUABE EKD OB MG BAG OPEN EWD WITH 

EVENEB8. 



60 Tooth, 10 Foot 

70 Tooth, 12 Foot 

JOTooth, ISFoot 

106 Tooth, 18 Foot 

120 Tooth, 20 Foot. 



With I With! 
liLtMQL in. teeth. 



115.86 
17.45 
24.50 
27.10 
34.00 



116.85 
18.55 
26.00 
28.75 
36.00 



140 Tooth, 24 Foot.. 

80 Tooth, 10 Foot.. 

120 Tooth, 15 Foot.. 

160 Tooth, 20 Foot.. 



With* 
in. teetn. 



137.80 

16.85 
26.00 
36.00 



With I 
in. teeth. 



|4a00 
17.85 
27.50 
3a 00 

1 



WOOD OB STEEL BAIL FLEXIBLE HABBOWS WITH EVENERS, 5 BAB. 



With i in. teeth. 

10 Foot $16.85 

12 Foot 19-^ 

16 Foot 26.00 



With i in. teeth. 

18 Foot $29.50 

20 Foot 36.00 

24 Foot 41.00 



DISC HAKROWS— CLASSITICATION AND EQUIPMENT. 
RBOOlilf ENDED JUNB 12, 1907. i t»i j 

Basic disc harrow shall consist of Single Lever, 16-mch Blades- 
no Weight Boxes, Neck Yoke or Stay Chains. 

4 and 5 foot equipped with 2-Horse Eveners. . 

6 foot and larger equipped with 3-Horse Eveners with Set-Over 

Irons or 4-Horse Eveners. j /^« 

The following to be considered as extras and always charged for 

when furnished: 



Set-Over Irons with 4-Horse Hitch. 
Tongue Truck or Fore CJarriage. 
6-Horse Hitch. 
Center Cut Attachment 



Double Lever. 
Weight Boxea 
Keck Yoke. 
Stay Chains. 



It is further recommended that the minimum differences m prices, 
all sizes, be as follows: 

BIZB OF DI8C0. 

18-in. Blades for 4 and 5-ft. widths, $1.50 net more than 16-in. 

^^ 18^ki. Blades for 6-ft width or more, $2.00 net more than 16-in. 

^^20-L Blades for 4 and S-ft. widths, $3.00 net more than 16-in. 

^^20^ Blades for 6-ft width or more, $4.00 net more than 16-in. 
blades. 



BXHIBITS. 



WIDTH OF CUT. 



289 



$1.00 net additional between 4 and 5-ft. Harrows. 
2.00 net additional between 6, 6, 7 and 8-ft Harrows. 
2.60 net additional between 8, 9 and 10-ft. and larger Harrows. 
It is recommended that all Disc Blades may be polished on the 
Concave side only at no additional charge. 

It is recommended that the price of $1.00 net, be made on Plow 
Cut Disc Harrows over the Solid or Concave Blades in all sizes. 
Also this style of Harrow be made in 16-inch Blades only. 
Recommended Apbil 30, 1909. 

That the above clauses pertaining to Plow Cut Discs be rescinded 
on account of one member making Plow Cut Discs a specialty and at 
about the same cost as the Solid Discs. 

It is recommended that the price of Cut Out Disc Harrow to be 
12J cents net per blade, more than solid or concave blades. 

Recommended April 30, 1909. 

That the minimum net differences in prices for Cut Out Disc 
Harrows over Solid or Plain Disc Harrows be changed to read as 
follows : 



4 Foot 

5 Foot 

6 Foot 

7 Foot 



$0. 50 

0.75 

1.00 

1.25 



8 Foot 

9 Foot 

10 Foot 



$1. 50 

1.75 

2.00 



It is understood that an exception will be made for Disc Harrows 
so constructed that it is necessary to furnish them with Double Lever 
and Weight Boxes; then the price may be made to include these 
extras, but in all other cases Disc Harrows should be priced without 
these parts. 

cultivatobs. 

Recommended June 12, 1907. 



BASIC SHOVEL CULTIVATOB- 



-WALKINQ AND BIDING — TO BE 4 SHOVEL, BTEEL BEAM, 
PIN BBEAK. 



Classification. 



1. Walking tongue, with rigid or adjustable arch, 

straight axle or balance frame. 

2. Walldng tongueless, with rigid or adfustable 

arch, with or without spring lift. 

3. Straight Rider, Hammock seat, rigid or pivot 

tongue. 

4. Straight Rider, pivot axle , 

6. Straight Riding surface 

e. Foot Shift or Foot Guide Riding, rigid or pivot 

tongue. 

7. Straight combined Riding and Walking, strad- 

dle seat, rigid or pivot tongue. 

8. Two Row with rigid tongue , 

9. Two Row with pivot axle , 

10. Disc, rigid or pivot tongue , 

11. Single Row sled lister 

12. Single Row wheellister , 

IS. Double Row wheel lister 

14. Double Row wheel lister with high frame (or 
three times over). 



Equipment. 



1. Neck yoke, hitch, shovels, wrench, shields and 

handles. 

2. Hitch, shovels, wrench, shields and handles. 

3. Neck yoke, hitch, shovels, shields and wrench. 

(No spreader arch.) 

4. Neck yoke, hitch, shovels, shields and wrench. 

5. Neck yoke, hitch, wrench, shields and levelers. 

6. Neck yoke, hitch, shovels, wrench and shields. 

7. Neck yoke, hitch, wrench, shields, shovels and 

handles. 

8. Three horse hitch, two neck yokes, wrench, shov- 

els and shields. 

9. Three horse hitch, two neck yokes, wrench, shov- 

els and shields. 

10. Neck yoke, hitch, wrench and shields. 

11. Regular. 

12. Two discs, two shovels, two horse hitch and neck 

yoke. 

13. Four discs, four shovels, shields, two two-horae 

hitches and two neck yokes. 

14. Same as No. 13. 



68248''— 15 ^19 



Ill 

I 



IH 
II 

nil 




290 



FAJIM-MACHINBBY TRADE ASSOCIATIOlfB. 



The following to be considered as extras and always charged for 

when furnished: 

MoMtKwrd Tnming Shovela 

Spring Trip Legs. 

Oopber Blades. 

HmiBg SboTela 

Bull Tongnea 

Pipe Beams. 

Surface Gangs. 

It is further recommended that the minimum net differences in 

prices be as follows: 



Oanopy Tops. 

Levellers for Disc Cultivators. 
Lister Bars for Disc Cultivators. 
Pivot Pole, or Pivot Pole Attachment 
Handles, with Hammock Seat, Foot 
Shift or Two Bow. 



Spring trip over pin break 
(per leg) I0.87J 

Pivot pole or pivot attach- 
ment 1.00 

Lister bars on disc cultivator-. . 60 



6 shovel over 4 shovel $1. 00 

8 shovel over 4 shovel 2. 00 

Eagle Claw over 4 shovel 1.00 

8 Tooth Spring Tooth Gang 

over 4 shovel 1.50 

10 Tooth Spring Tooth Gang 

over 4 shovel 2. 00 

It is understood that Spreader Arches be considered a part of the 
regular equipment of Combined Riding and Walking Cultivators, 
Pivot Axle Cultivators, Crank Guide Cultivators and Two Row Cul- 
tivators, and a reduction of fifty cents each can be allowed when 
these arches are not furnished, excepting on the Crank Guide Culti- 
vators, when they are also equipped with return springs, then they 
are to be considered as extras and a charge of fifty cents made for 
them. 



BIDING FLOWS. 



BXCOMMENDED AFBII. 8, 1908. 



Oaaslflcatkn. 



1. Sulky Fknir, Low Lift, Fk»mele88, no Pole. 



1 flolkf Ptoir, HiKh Lift, wtth Rrnmo and Polo. 



a a««Plinr, Low Lift, FnuMtai,ntFoit.. 



Equipment 



C Grag Plow, High lift, wflh FMone tnd Pole. 



16 Inch Bottom, Seat, 1 Land Wheel, 2 Furrow 
Wheels, 3-horse Evener, Weed Hook. 16 inch 
Rolliiu; Coulter, Senper far rear Wheel and flat 
W rPTM^h* 

16 inch Bottom, Seat, 1 Land Whed, 2 Furrow 
Wheels, S-horse Evener, Nedcyoke, Weed Hook, 
15 faich RoUlnff Coulter, Scraper for rear Wheel, 
and flat Wrencn. 

Two 14 inch Bottoms, Seat, 1 Land Wheel, 2 Furrow 
Wheels, 4-horae Evener, 2 Weed Ho<^ two 15 
inch Rolling Coulters, Scraper for rear Wheel, and 
flat Wrench. 

Two 14 inch Bottoms, Seat, 1 Land Wheel, 2 Furrow 
Wheels, 4-hor9e Evener, Neckyoke, two 15 Inch 
Rolltaig Coulten, 3 ^««<1 Hooks, Scraper for rear 
Wheel and flat wrench. 



It is recommended that when the following Equipment is furnished 
with Biding Plows, the ADomoNAL list prices be as Follows: 



Pole Attaduneiit for Low lift Sulky or Gang. 

Front Fnrrow Wlieel Scraper 

Jointer, Steel 
Jointer, Cast Iron. 



$8.00 

. 60 

3.00 

2. 60 

Umbrella or Sunshade, Complete 3. 00 

Four-Horse Evener over S-Horse for Sulky 2.00 

MT^-Horse Abreast or Stnmg-out Evener Over 4-Hor8e for Gang 3.00 

Five-Horse Strang-out Bvaier, less Lead, Doubletree, over 4-Hor8e for 

Q«iig 2.00 

Sfz-Horse Bvener over 4-Horse for Gang 4- 00 

Ifactra Heairy Beams for Gang Plow _— ** 00 

Sw«ep Attachment for Low Lift Sulky 3. 00 

WMle Breaker Attachment for Low Lift Sulky 



f> 



291 

Riding pix)w8 equipped with Black Land, Sandy Land, or Breaker 
Bottoms, REGULAR WITH EXTRA soMD SHARES (the Same as Walking 
Plows). * 

listing plows. 
Recommended April 8, 1908. 



Claasifloation. 



1. Walking Lister. MIn. S. C. Steel Bottom 

2. Walking Combmed Lister, 14 in. S. C. Steel Bot- 

tom. 



8. Two Wheel Sulky Lister, 14 in. S. C. Steel Bot- 
torn. 



4. Foot Wheel Sulky Lister, with 14 in. 8. C. Steel 
Bottom. 



i. ToogoelesB Lister, with foor wheels and 14 in. 
8. (3. Steel Bottom. 



•■ ^ ^^ ^"^ I'*'*** ^^ *wo 14 in. 8. a 
Steel Bottoms. 



Equipment. 



Sub-soil Attachment. 

Subsoil Attachment, Indn)endent Drill Attach- 

paent, Covering Shovels. 6 Plates (Including one 

• m Machine and one blank). Root Cutter and small 
Wrench. 

Drill Attachment, 13 or 14 faich Rolling Coulter. 
Covering Shovels, Sub-sofler, Seat, Pole, 4-Hoi8e 
Evener, Neckyoke, 6 Hates (including one in 
Ma c hine and one blank). Root Cutter and Flat 
Wrench. 

Drill Attachment, 13 or 14 inch RolUng Coulter, 
Sub-eoller, Shovel or Knife Coverers. Pole, 4- 
Horse Evener, Neckyoke. 6 Plates (induding one 
in Machine and one blank), rear Wheel Scrapers. 
Root Cutter and flat Wrench. 

Drill Attachment, 13 or 14 hich Rolling Coultw, 
Sub-soiler, Shovel or Knife Coverers, 4-Hotse 
Evener, 6 Plates (includuig one hi Machine and 
one blank), rear Wheel Scrapers, Root Cutter and 
flat Wrench. 

2 Drill Attachments, two 13 or 14 inch Rolling Coul- 
ters, Seat, 2 pairs Shovel or Knife Coverers, 2 Sub- 
soilers, 6-Horse Evener, Pole, Neckyoke, 12 Plates 
(including two in Mft/>hinfi and two blank), and 
flat Wrench. 



It is recommended that when the following special equipment is 
furnished with plows, the additional list prices be as follows : 

1. Pole for Tongueless Lister not less than $3.00 each 

2. Disc Coverers: 

10 inch and under " « « lqq pair 

over 10 inches « «« «< 2.OO " 

8. Cotton Planter Attachment ZZHIl " " " 2.00 each 

It is further recommended that when the following Parts are not 
furnished with plows, the maximum deduction in list prices be 
as follows: 

Sub-soiler Attachment ^^^ g^^jjj 

Solid Steel Shares in place of Soft Center Steel SharesIZIZZZIIIIII 1.00 •• ' 



DISC PLOWS. 



Rboommehdid Apszl 8, 1908. 



Classification. 



1. Sulky 

2. Two Furrow Gang... 
S. Three Furrow Gang. 
4. Four Fnrrow Gang. . 



Equipmoit. 






24 fa. Disc. 3-Horse Evener, Disc Scraper or Cleaner 

and Wrench. 
Two 24 in. Discs, 4-Horse Evener. Disc Scrapers or 

Cleaners and Wrench. 
Three 24 m. Discs, 4-Horse Evener, Disc Scrapen 

and Wrench. 
Four 24 fa. Discs, 6-Horse Evener Disc Senders or 

Cleaners and Wrench. 






jSVjS 



VABM-MAOHIirEBY TRADE ASS00IATI0K8. 



EXHIBITS. 



1 



11 






It is recommended that when the following equipment is furnished 
with Plows, the additional list prices be as follows : 

Weed Hooks ^ch $ . 50 

Plows with 26 inch Disc extra per disc 1.00 

Cast Iron Wlieel Weiglits per pound .06 

4-Horse Evener over 3-Horse for Sulky extra, each 2, 00 

5-Horse Abreast or Strung-out Evener over 4-Horse for Gang__extra, each 3. 00 
S-Horse Stmng-out Evener, less Lead Doubletree, over 4-Horse for 

Qang extra, each 2. 00 

e-Horse Eve'neroveri-Horsefor Two or Three Furrow Gang— extra, each 4. 00 

ROD BREAKING FLOWS. 



Classificfttkm. 



1. Rod Breaking Plows, with Steel Beam, and Fin 
Cutter attached to Bottom. 



Equipment. 



Extra Share with Fin Cutter, Gauge Wheel or 
Gauge Shoe. 



CORN PLANTERS AND DRILLS. 



Becommende3> April 8, 1908. 



Classification. 



1. Corn PlanUsr, a-Row, with combined check 
Rower and DrllL 



% Com Planter, 9-Row with Drill, lets Cheek Rower. 



n. Com Planter, a-Row, with Check Rower-Full 
HUl Drop (no Drill}. 



4. Com Drill, 3 Row. 



Equipment 



§, Com Drill, 2 Row Edge Drop. 



«. Combined Cora and Cotton Planter, 2 Row with 
Check Rower and DrilL 



7. Combined Cotton and Com 2 Row Drffl. 



Pole, Seat, 1 pr. 30 in. Wheels with open or concave 
Tire, set for 3'-2", 3'-4", 3'-0", 3'-8" or 3'-10", 5 

S'S. Plates (including one in Machine), 1 Marker 
ope, 4 extra links Drive Chain. 80 Rods C. R. 
S'-a*', 3'-4", 3'-6", 3'-8". or 3'-10" Wire, 6 extra 
Open Links for C. R. Wire, 1 C. R. Rope, 1 pr. 
Steel Stakes for C. R. Wire, one plain Wrench 
(not Monkey). ^ 

Pole. Seat, l pr. 30 in. Wheels, with open or Con- 
cave Tire, set for 3'-2", 3'-4", 3'-6", 3'-8^', or 3'-10", 
6prs. plates (including one in Machine). 1 Marker 
Rope. 4 extra links Drive Chain , one Plain Wrench 
(not Monkey). ^ 

Pole. Seat, 1 pr. 30 in. Wheels, with open or Con- 
cave Tire, set for 3'-2", 3'-4", 3'-6", 3'-S", or 3'-10", 
8 prs. Plates (including one in Machine), 1 Marker 
Rope, 4 extra links Drive Chain, 80 Rods C. R. 
Wfre, 3'-2", 3'-4", 3'-6", 3'-8", or 3'-10", 6 extra 
open Links for C R. Wire, I C. R. Rope, 1 pr. Steel 
Stakes for C. R. Wire, one Plain Wrench (not 
Monkey). 

Pole, Seat, 1 pr. 30-ln. Wheels with open or Concave 
Tire, 3 prs. Plates (including one in Machine), 1 
Marker Rope, 4 extra Links Drive Chain, erne 
Plain Wrench (not Monkey). 

Pole, Seat, 1 pr. 30-in. Wheels with open or Ckmcave 
Tire, 5 prs. Plates (Including one in Machine), 1 
Marker Rope, 4 extra Links Drive Chain and one 
Plain Wrench. 

Pole, Seat, 1 pr. 30-ln. Wheels with open or Concave 
Ti^e set for 3'-2", 3'-4", 3'-6", 3'-8", or 3'-10", 5 

Srs. Plates (including one in Machine), Ipr. Cotton 
gitator Plates, 6 extra open Links for C. R. Wire, 
1 C. R. Rope, 1 pr. Steel Stakes and 1 plain Wrench. 
Pole, Seat, 1 pr. 30-in. Wheels with open or Concave 
Tire, 4 prs. Plates (including one in machine), 1 
pair Cotton Agitator Plates, 1 marker Rope, 4 
extra Links Drive Chain and one Plain Wrench. 



♦li 



293 



It IS recommen(ied that when the following special equipment is 
furnished with Planters and Drills, the additional list prices be as 
follows : 



(( 



u 



tt 

« 

M 
4( 



Fertilizer Attachments |20. 00 each 

Drill Attachment 4. (X) 

Fodder Attachment I__II S. 00 

Hand Drop Attachment including seat — changed April 30, '09 from 

$1.00 to 2. 00 

Disc in place of regular Runners 2. 00 

Disc Furrowers g. 00 

Shovel Furrowers 3. OO 

Coverers 4. 00 

Combined Furrowers and Coverers 4.00 

Gauge Shoes for Runners 1.50 

1 pr. Special Plates for Broom Com 

1 pr. Special Plates for Kaffir Corn 

f pr. Special Plates for Sorghum 

1 pr. Special Plates for Milo Maize 

1 pr. Special Plates for Millet 

1 pr. Special Plates for Peas 

1 pr. Special Plates for Beans 

Two-Horse Evener and Neckyoke list $2. 00 each 

Planters — with Wheels over 30 in. in diameter list 4. 00 *' 

Pincers . Ust . 50 pair 

It is further recommended that when the following are not fur- 
nished with Planters, the maximum* deduction in list prices be as 
follows: 

Check Rower, Complete |io. 00 each 

Check Rower, and all parts stripped to make " Com Drill " only 14. 00 *• 

COTTON PLANTERS AND DRILLS. 
Recommended Apbil 8, 190S. 



Changed 4-30-09 from 
$1.00 to 60c per pair, 
list 



Classification. 



1. One Row Corn Drill Steel Frame and 

Hopper with Cover, Chain or Gear 
Drive. 

2. One-Row Corn DrilJL Steel Frame 

and Hopper with Cover, Chain or 
Gear Drive. 

3. One-Row Steel Frame Cotton and 

Corn Plantar, Chain or Gear Drive. 

4. Two-Horse One-Row Cotton and 

Corn Planter. 



Rectnnmended Tune 16, 1909. 



Equipment. 



Opening Shovel, 1 pr. Covering Shovels, 4 Plates (including on* 
in Machine), and small Wrench. 

Runner or Sword Opener, 1 pr. Covering Shovels, 4 Plates (in- 
cluding one in Machine), and small Wrench. 

steel Hopper or Box, 4 Corn Plates (Including one in Machine), 
1 Cotton Agitator Plate and small Wrench. 

2 Wheels, Seat, Pole, Steel Seed Box, with Open» or Seed 
Shovel, 2 rear Covering Shovels, Front Shank or Standard 
with Wood Break Pin lor Middle Breaker or Sweep, 4 Com 
Plates (including one in Machine), 1 Cotton Agitator Plate, 
flat Wrench. 
Add Evener and Neckyoke. 



It is recommended that when the following equipment is furnished 
with Drills or Planters, except two horse one row C. & C. Planter, 
the ADDITIONAL LIST PRICES be as follows : 

Gauge Shoe for Drills $0. 50 each. 

Wide or Open Tire Drive Wheel . 50 " 

Cast Iron Roller Attachment for 1-Horse Machine 2. 00 " 

Fertilizer Attachment for 1-Horse Machine 6. 00 " 

Extension Hoppers . 50 »• 

Spring Trip Standards for 2-Horse Planter 1. 50 •* 

Two-Horse Evener and Neckyoke 2. 00 ** 



I 



l< 



im 



HI 



li 



2v« 



VABM-lCAOmKSET TRMUm A8800UII0N8. 



STALK CUTTEBS. 



Rbcommkhvid Afbil 8, 1908. 



nnmilflrtitlffli 



L Stelk Cmm, Sinsto Row.. 
& BtMSk CaUm, Doobto Bow. 



EqaipnuQt 



Ftvt KaiTtB «ad SmaU flat Wrench. (No Eyvur 
orNeekyoka.) .. ^ ^ 

T«a Knives. 3-Borsa Evenv, 3 NackyokM, and 
SmaU Oat Wraacii. 



It is recommended that when the following equipment is furnished 
with Stalk Cutters, the additional list prices be as follows : 



Additional KnlTes for Single Row 

*• " Double " 

Two-Hone Brener and Neckyoke for Single Row . 



per knife ILOO 

2.00 
2. 00 



REVISED LIST PRICE OF EXTRA PLOW SHARES. 

CAdopted AafQSt 25, 1908. Effectlre Sprinf Trade 1910 or Earlier.) 

101 MWBUt BKKAinnt PLOWg. 

Jfationai Plow i.M'fi fieHee. 



9 Incb 

10 inch 



12 inch 



12.00 

2.90 

2.50 



14 inch 

16 inch 



FOB LXanifQ FLOWB. 



14 Inch Mild ... 
16 Inch Mild 



$2.76 

3.25 



Hard..... 
Hard 



12.75 
3.25 



$4.00 
4.50 



For Stubble 

Sandj Land 
Mixed Land and 



BOLIO OB MILD TEMPEBED BUF 8HABB8 

Tarf and Stubble 
Black Land 
Blue Bird 



SERIES OF WALKING AND BIDINQ FLOWS. 



7 inch $1.10 

7i inch 1.10 

8 inch 1. 10 

81 inch 1- 25 

9 inch 1. 35 

9i inch 1. 45 

10 inch 1.60 



11 inch 

12 inch 

13 inch 

14 inch 

15 inch 

16 inch 

18 inch 



$1.76 
2.00 
2.00 
2.50 
3.00 
3.00 
3.50 



CULTIVATOR SHOVELS. 



Recommended Apbil 8, 1908. 



ODlttrator Gaofi. 



L Four Sbovd— far NorttMcm tsrttory. 
1 WwB Shovd'for Soathara tcrtlory. 



S. Six Shovel.... 
4 EaglaClaw... 
g, Spring Tootb. 



DflBcr^tlon of Shovels. Hard or MOd. Straight 
or Twisted. 



Four— 5 inches wide or nnd« by 11 tBohes kog «r 

under. 
Two-5 Inches wide or under. 
Two-Spedal Wing. 

All 11 inches long or onder. 
Six— 3i inches wide or onder by • IndieB long or 

onder. 
Eight— 3 inches wide or onder by 9 Incbea Vang or 

onder. 
8 biches wide or nnder. 

by 6 inches long or onder, Single Point 
by 8i inches long or onder, Double Point 



EXHIBITS. 295 

It is recommended that the additional list prices per cultivatoe 
for all shovels in excess of above dimensions be as follows : 

For Four and Six Shovel Cultivators $0. 50 per set, list 

For Eagle and Spring Tooth Cultivators 1. 00 per set, list 

N. B. The width to be measured at top of shovel. 

CULTIVATOR WHEELS. 



Coltivators. 


Desoription of tire. 


Walking Cultivators 


U inch TirA or nnder 


RldiUR Cultivator 


2 inch Tire or under. 


Two Row Cultivators 


3 inch Tire or undn* 







It is recommended that the additional list prices for all Wheels 
with Wider Tire than specified above be as follows : 

Walking Cultivators, for each additional J inch in width, 50 cents 
per Cultivator, list. 

Riding Cultivators, for each additional J inch in width, $1.00 per 
Cultivator, list. 

It is also recommended that the Maximum Width of Tire for 
Walking Cultivators be 2 inches. 

standard dimensions of common parts, 
finished neck yokes. 
Adopted Maboh 10, 1909. 



Pattern No. 1 \ 2 6/16 in', centerinmi I ^°' sulky 



I 
[ 



1% 



in. ends.. 



42 in. long 1 Fob walking, biding and 

Pattern No. 2 { 2 5/16 in. center > disc cultivatobs and 

1% in. ends ^J listing flows. 

bingletbees. 



1 
;1 



AND QANO 



plows. 



Adopted Maboh 10, 1909. 

No. 1 singletree — for cultivators, 

1% in. thick X 2% in. wide— 26 in. Finished, 
or 1% in. thick x 2% in. wide— 27 in. Rough. 

No. £ singletree — for plows and harrows, 

1% in. thick x 2 in. wide— 27 in. Finished. 
or 2 in. thick x 2% in. wide— 28 in. Rough. 



Adopted Afbil 14, 1909. 



YELLOW pine POLES. 



Fob Sulky 
Gang 

COBN 

Stalk 
Walking 
Riding 
Disc 



Plows 

Plows 

Plantebs 

Cuttebs 

cultivatobs- 
Cultivatobs- 
cultivatobs. 



Two Row Cultivatobs. 



Rough Purchase Sizes. 
(Two Poles in one piece.) 

3 in. X 6 in., 12 feet 

18 feet in one piece or 
9 feet in one pole. 



FobDiso 



Habbows 



-I 



3 in. X 7 in., 12 feet. 

21 feet in one piece, or 

lOV^ feet in one pole. 



ihi 



li 



I 



296 FABM-MAOHINEBY TRADE ASSOCIATIONS. 

National Plow Association. 

MST of officers AND EXECUTIVE COMMITTEES. 

Fob 1907-1908. 

Oiflcers, — J. A. Craig, president, Janesville, Wis.; Wm. H. Taylor, 
vice president, Peoria, ill.; W. B. Brinton, treasurer, Dixon, 111.; 
C. E. Sanders, secretary, Chicago, 111. 

Executive committee, — Wm. Butterworth, Moline, 111.; G. A. 
Stephens, Moline, 111. ; W. H. Parlin, Canton, 111. ; C. S. Branting- 
ham, Rockford, 111.; H. M. Wallis, Racine, Wis.; C. F. Huhlein, 
Louisville, Ky. ; J. A. Craig, Janesville, Wis. 

Fob 1908-1909. 

OUtcers. — C. S. Brantingham, president, Rockford, 111. ; C. E. Gilt- 
ner, vice president, Racine, Wis.: A. J. Brosseau, treasurer, Albion, 
Mich. ; C. E. Sanders, secretary, Chicago, 111. 

Executive committee, — Wm. Butterworth, Moline, 111.; G. A. 
Stephens, Moline, 111. ; W. H. Parlin, Canton, lU. ; C. F. Huhlein, 
Louisville, Ky. ; W. I. Bogardus, Rock Island, 111. ; Wm. H. Taylor, 
Peoria, 111. ; W. B. Brinton, Dixon, 111.; J. A. Craig, Janesville, Wis. ; 
C. S. Brantingham, Rockford, 111. 

F6b 1909-1910. 

Oiflcera, — ^Wm. Butterworth, president, Moline, 111. ; H. C. Rob- 
erts, vice president, Peoria, lU.; T. Y. Davis, treasurer. Sterling, 111.; 
C. E. Sanders, secretary, Chicago, 111. 

Executive committee, — ^W. H. Parlin^anton, 111.; C. S. Branting- 
ham, Rockford, 111. ; W. B. Brinton, Dixon, IQ. ; Wm. H. Taylor, 
Peoria, 111.; A. Hirshheimer, La Crosse, Wis.; H. M. Wallis, Racine, 
Wis. ; J. F. Lardner, Rock Island, 111. ; A. J. Brosseau, Albion, Mich. ; 
Wm. Butterworth, Moline, 111. 

. STANDING COMMITTEES FOB 1909-1910. 

Oast committee, — G. W. Crampton, chairman ; H. M. Wallis, XJ. G. 
Orendorff, T. P. Luby, C. S. Brantingham. 

Freight transportation committee, — C. B. Gregory, chairman; 
A. R. Ebi, W. J. Evans. 

Legislation committee, — ^U. G. Orendorflf, chairman ; Wm. Butter- 
worth, W. B. Brinton. 

Membership committee. — J. A. Craig, chairman; E. O. McLean, 
A. J. Street, A. J. Brosseau, W. W. Wiard. 

Standard equipment committee, — A. J. Brosseau, chairman; F. J. 
Savage, U. G. Ciendorff, R. C. Anderson, Wm. Black, A. J. Street, 
T. P. Luby. 

Exhibit 19. 

BEPOBT OF COMMITTEE ON SHOP COSTS ANB SELLINa EXPENSES, 
TO NATIONAL ASSOCIATION OF THBESHEB MANX7FACTI7BEBS, 
AVOVST, 1904.' 

Your committee would respectfully report that they have taken up 
the cost of manufacturing engines, separators and parts, and the ex- 

1 See text (p. 56) for reference to subsequent amendments to this report 



EXHIBITS. 297 

pense of marketing the same. They have also made comparisons of 
machinery and costs a]jd taken into consideration the various sizes 
and kinds of threshing machinery. 

That after full investigation of the same, it is the opinion of your 
committee that the machinery can not be manufactured and put on 
the market, paymg cost of selling at less than so that they each shall 
net the manufacturer the amount hereinafter set forth. 

The results of cash sales, single or in large quantities and time 
sales, have been taken into consideration. A cash sale requires no 
additional expense. 

These amounts are not reported as a price^ as each manufacturer is 
free to fix and settle on his own lists and selling price, without limita- 
tions, and are not governed by this Association. 

, These amounts are found by your committee after comparisons 
made of kind and sizes of goods and their knowledge of costs of 
manufacture and expenses of selling and making collections, and 
trust may be of value and of aid to each of us. 

The commissions allowed for selling have not been added. We 
believe that the net results of each sale would require an amount equal 
to the amount quoted by us, in order to obtain a reimbursement for 
the expense of manufacturing and selling, and that to sell below the 
amounts would, in many cases, result in a loss. These figures are 
given for what they may be worth, and can be used or not as each 
manufacturer may determine, each being free to act and settle his 
price list as he deems best. 

The cost of engines and separators of other sizes, we believe to be 
between the figures of the size named next above and below. 

freight. 

In making estimates we have assumed that customer pays freight 
from factory. There would be no leeway, but, on the contrary, a loss, 
if freight was allowed west of the Mississippi River. 

transportation of customers. 

We have made no allowance for cost of transportation of customers 
to factory or Branch House. This would be an additional burden, 
and such expense ought not to be allowed by any manufacturer. 

NET RESUIiTS OF SALES. 
PLAIN SEPARATORS, WITHOUT FOLDING STACKER AND HAND FEED ATTACHMENT. 

(TlM«AU Cash" column is inteaded to mean where an agent cashes all sales made during tha season and 

where it amounts to two or more outfits or machines.) 



Sise Separator. 



24x40. 
28x40. 
28x48. 
30x43. 
30x44. 
30x48. 
30x50. 
32x48. 
32x62. 
33x52. 
33x53. 
33x5f.. 
36x52. 



Time. 



S340.00 
357.00 
366.00 
366.00 
366.00 
374.00 
383.00 
383.00 
395.00 
400.00 
400.00 
425.00 
404.00 



Shlgla 
Cash. 



1306.00 
321.00 
329.00 
329.00 
329.00 
337.00 
344.00 
344.00 
356.00 
360.00 
360.00 
383.00 
363.00 



AUCash. 



S300.00 
315.00 
323.00 
323.00 
323.00 
330.00 
338.00 
338.00 
349.00 

'353.00 
353.00 
375.00 
356.00 



Size Separator. 



36x54 

36x56 

36x60 

37x60 

40x56 

40x60 

40x63 

40x64 

44x64 

44x66 

44 X (8 

For fold ill 5 or Plain 
Carrier 



Thne. 



$417.00 
434.00 
468.00 
472.00 
468.00 
489.00 
493.00 
497.00 
510.00 
523.00 
531.00 

25.50 



Single 
C^. 



AUCash. 



$376.00 
390.00 
421.00 
425.00 
421.00 
440.00 
444.00 
448.00 
459.00 
470.00 
478.00 

22.95 



$368.00 
383.00 
413.00 
416.00 
413.00 
431.00 
435.00 
439.00 
450.00 
461.00 
469.00 

22.10 



^ 



IR 



298 



FABH-MAOHIKBBT TR4IIB ASBOOIATEOITS. 



TB40TXON wmmntB, 



eB.r.C<»lBiii]iir. 

g M MM 

lO <* MM 

U M MM 

H It MM 



1893.60 
977. '*) 
1,062.50 
1,147.50 
1,190.00 
1,232.50 
1,276.00 



Slnclt 



1808.26 

879.75 

95'^. 25 

1,082.75 

i,on.oo 

1,100.25 
1,147.60 



idlOuh. 



8iM EogiDe. 



1787.50 
862.50 
937.50 

1,012.50 

i,06aoo 

1,087.50 
1^25.00 



16 H. P. Coal BnniAr. 

18 " « M 

20 M MM 

23 « MM 

25 M u m 

2D H MM 

30 « MM 






81,317.50 
1,402.50 
1,487.60 
1,572.50 
1,700.00 
1,742.50 
1,912.50 






81,186.75 
1,262.25 
1,338.75 
1,415.26 
1,530.00 
1,568.25 
1,721.25 



AU 



81,162.50 
1,237.60 
1,312.60 
1,387.60 
1,500.00 
1,637.60 
1,687.60 



Each additional horse power we estimate at $42.50, time. 

To the foregoing should be added an additional cost if boilers are 

jacketed. 

On time sales— $42.50. 

On single cash sales — $38.25. 

All ca^ sales— $37.50. . . ^ . i 

The additional cost of sfcraw-bummg engines, over and above coal, 
would be the jacket and straw-burning attachments, which we be- 
lieve would be on time sales, $85.00; single cash sales, $76.50, and all 

cash sales, $75.00. -m- • i. 

The cost of engine cabs varies according to sizes. We estimate 

$30.00 for the smaller ones. 

WKI0HEB8 AND BAGGiaEtB. 





Time. 


CMh. 


All Cash. 


TaOmdcPer. Weigber 

Parfieetion Weigher.... 

Doable Tube 


$63.75 
67.35 
57.35 


867.38 
51.65 
51.66 


166.25 

60.60 
60.00 



AIT other styles of baggers and weighers in like proportion. 

lOBOELLAimmi. 



8elffeeder»— 

Above 83-iDdL. 

sa-lnch and 

smaller 

HofseJPower*— 

lOH. P 

12H.P 

14H.P 

Attached Swing 
Stkxs 



Time 



1180.00 

143.60 

150.00 
157.50 
166.00 

137.60 



Single 

Cash 

Sales. 



PK.00 

135.00 
141.75 
148.50 

114.78 



AU Sales 

Cashed 

Two or 

more 

Bales 



1180.00 

123.60 

130.00 
136.50 
143.00 

112.60 



Steel 



Steel 



13 BbL 

Tanks— 

Iftd... 

Plain. 

15 Bbl. 

Tanks— 

Mtd 

Plain 

Fol<ling Stacker.... 
Hand Feed Attach- 
ment 



Time 



190.00 
62.50 



97.50 
60.00 
25.50 



Single 
Cask 
Sales 



881.00 
47.25 



87.75 
54.00 
22.95 



All Sales 

Cashed 

Two or 

more 

Sales 



8.60 



7.66 



t78.00 
4ft.iO 



84.80 
68.00 
22.10 

7.60 



BEPATRfl. 



The cost of repairs would be too difficult for your committee to 
act upon. We find that the usual commission paid is 25 per cent, 
and that on lists not uniform in price. In the opmion of the com- 
mittee such a commission for selling is sufficient. 



299 



Exhibit 20. 



VOBM or LICENSE CONTBACT ISSUED BY INDIANA MANUEACTUB- 
ING CO., AXJTHOBIZING THE USB OE ITS PATENTS, 1914. 

[Form of agreement for use in connection with grain separators.] 

Separator 

LICENSE AND AGREEMENT BETWEEN THE INDIANA MANUPACTURINO 

COMPANY AND , 

Whereas, The Indiana Manufacturing Company, a corporation 
duly organized under the laws of the State of West Virginia, and 
having its principal office and place of business at Indianapolis, 
Marion County, in the State of Indiana, hereinafter denominated 
the party of the first part, is the owner of certain Letters Patent of 
the United States upon various inventions and improvements relat- 
ing to machines or apparatus for taking away straw, stalks, dust, etc., 
from machines used m threshing or separating and cleaning grain, 
seeds, etc., and conveying away and depositing the same upon stacks 
or elsewhere, such machines being generally known as " Pneumatic 
Stackers " ; and also by means of exclusive license contracts and other- 
wise controls various other inventions and improvements and the 
Letters Patent thereon, relating to such machines; which said Letters 
Patent of the United States, so owned and controlled by said party 
of the first part include those numbered and dated as follows, to- wit : 



No. 532,428, Jan. 8, 1895 ; 
No. 634,580, Feb. 19, 1895 ; 
No. 535,296, March 5, 1895 ; 
No. 536, 793, April 2, 1895 ; 
No. 536,951, April 2, 1895 ; 
No. 537,070, April 9, 1895 ; 
No. 537,690, April 16, 1895 ; 
No. 537,691, April 16, 1895 ; 
No. 540,102, May 28, 1895 ; 
No. 540,673, June 4, 1895 ; 
No. 541,936, July 2, 1895 ; 
No. 645,297, Aug. 27, 1895 ; 
No. 552,275, Dec. 31, 1895 ; 
No. 556,776, March 24, 

1896 * 
No. 557,020, March 24, 

1896; 
No. 559.196, April 28, 1896 ; 
No. 562,227, June 16, 1896 ; 
No. 566,491, Aug. 25, 1896 ; 
No. 566,494, Aug. 25, 1896 ; 
No. 566, 841, Sept. 1, 1896 ; 
No. 567,031, Sept. 1, 1896 ; 
No. 568,315, Sept. 22, 1896 ; 
No. 568, 883, Oct. 6, 1896; 
No. 569,504, Oct. 13, 1896 ; 
No. 571,898, Nov. 24, 1896 ; 
No. 673,126, Dec. 15, 1896 ; 
No. 676,149, Feb. 2, 1897; 
No. 676, 740, Feb. 9, 1897 ; 
No. 677,117, Feb. 16, 1897 ; 
No. 680,669, April 13, 1897 ; 
No. 681,326, April 27, 1897 ; 



No. 584,160, June 8, 1897 ; 
No. 588,416, Aug. 17, 1897 ; 
No. 588,910, Aug. 24, 1897 ; 
No. 589,125, Aug. 31, 1897 ; 
No. 589,146, Aug. 31, 1897 ; 
No. 592,672, Oct. 26, 1897 ; 
No. 592,673, Oct. 26, 1897 ; 
No. 593,995, Nov. 23, 1897 ; 
No. 594,124, Nov. 23, 1897 ; 
No. 594,266, Nov. 23, 1897 ; 
No. 595,390, Dec. 14, 1897 ; 
No. 596,307, Dec. 28, 1897 ; 
No. 596,914, Jan. 4, 1898 ; 
No. 598,885, Feb. 8, 1898 ; 
No. 599,279, Feb. 15, 1898 ; 
No. 601,356, March 29, 

1898 * 
No. 602,063, April 12, 1898 ; 
No. 603,040, April 26, 1898 ; 
No. 603,593, May 3, 1898 ; 
No. 605,925, June 21, 1898 ; 
No. 608,223, Aug. 2, 1898 ; 
No. 609,623, Aug. 23, 1898 ; 
No. 611,383, Sept. 27, 1898 ; 
No. 611,384, Sept. 27, 1898 ; 
No. 612,213, Oct. 11, 1898 ; 
No. 613,260, Nov. 1, 1898 ; 
No. 614,979, Nov. 29, 1898 ; 
No. 617,939, Jan. 17, 1899 ; 
No. 621,428, March 21, 

1899; 
No. 633,383, Sept. 19, 1899 ; 
No. 633,559, Sept. 26, 1899 ; 



No. 633,560, Sept. 26, 1899 ; 
No. 633,561, Sept 26, 1899 ; 
No. 635,024, Oct. 17, 1899 ; 
No. 638,191, Nov. 28, 1899 ; 
No. 638,560, Dec. 5, 1899 ; 
No. 638,878, Dec. 12, 1899 ; 
No. 639,187, Dec. 12, 1899 ; 
No. 639,448, Dec. 19, 1899 ; 
No. 646,708, April 3, 1900 ; 
D. No. 32,447, April 3, 

1900; 
No. 648,514, May 1, 1900 ; 
No. 649,492, May 15, 1900 ; 
No. 649,575, May 15, 1900 ; 
No. 652,452, June 26, 1900 ; 
No. 660,591, Oct. 30, 1900 ; 
No. 663,150, Dec. 4, 1900; 
No. 668,141, Feb. 12, 1901 ; 
No. 672,732, April 23, 1901 ; 
No. 675,337, May 28, 1901 ; 
No. 685,628, Oct. 29, 1901 ; 
No. 686,144, Nov. 5, 1901 ; 
No. 686,145, Nov. 5, 1901 ; 
No. 686,986, Nov. 19, 1901 ; 
No. 696,954, April 8, 1902 ; 
No. 697,653, April 15, 1902 ; 
No. 702,766, June 17, 1^02 ; 
No. 703,078, June 24, 1902 ; 
No. 705,987, July 29, 1902 ; 
No. 706,037, Aug. 5, 1902 ; 
R. No. 12,022, Aug. 19, 

1902; 
No. 712,902, Nov. 4, 1902 ; 



300 



»ABM-MA0H1NEBY TBADB ASSOCIATIONS. 



ilf 






No. 718,119, Nov. 11, 1902 ; 
No. 713,739, Nov. 18, 1902 ; 
No. 714,525, Nov. 25, 1902 ; 
No. 714.526, Nov. 25, 1902 ; 
No. 715,349, Dec. 9, 1902; 
No. 715,700, Dec. 16, 1902 ; 
No. 717,465, Dec. 30, 1902 ; 
No. 718395, Jan. 13, 1903 ; 
No. 720,486, Feb. 10, 1903 ; 
No. 721,243, Feb. 24, 1903 ; 
No. 722,369, March 10, 

1903* 
No. 723,204, Marcli 17, 
1903* 

No. 725*624, April 14, 1903 ; 

No. 727,093, May 5, 1903 ; 

No. 728,511, May 19, 1903 ; 

No. 729,947, June 2, 1903 ; 

No. 736,599, Aug. 18, 1903 ; 

No. 740,695, Oct 6, 1903 ; 

No. 741,770, Oct. 20, 1903 ; 

No. 747,251, Dec. 15, 1903 ; 

No. 747,896, Dec. 22, 1903 ; 

No. 761,627, Feb. 9, 1904 ; 

No. 768,606, April 26. 1904 ; 

No. 7«1,761, June 7, 1904 *, 

No. 762,463, June 14, 1904 ; 

No. 762,917, June 21. 1904 ; 

No. 7«S2,918, June 21, 1904 ; 

No. 765.403, July 19. 1904 ; 



No. 776,456, Nov. 29, 1904 ; 
No. 786,071, Marcli 28, 

1905' 
No. 811,532, Jan. 30, 1906 ; 
No. 811,786, Feb. 6, 1906; 
No. 821,584, May 22, 1906 ; 
No. 823,418, June 12, 1906 : 
No. 830,337, Sept. 4, 1906 ; 
No. 830,618, Sept. 11, 1906 ; 
No. 832,283, Oct. 2, 1906; 
No. 840,603. Jan. 8, 1907 ; 
No. 845,876, March 5, 

1907 * 
B. No! 12,655, May 21, 

1907* 
No. 856*609, June 11, 1907 ; 
No. 866,240, Sept. 17, 1907 ; 
No. 872,868, Dec. 3, 1907 ; 
No. 873,829, Dec. 17, 1907 ; 
No. 877,320, Jan. 21, 1908 ; 
No. 888.571, May 26, 1908 ; 
No. 902,841, Nov. 3, 1908 ; 
No. 902,842, Nov. 3, 1908; 
No. 903,743, Nov. 10, 1908 ; 
No. 921,341, May 11, 1909 ; 
B. No. 13,039, Nov. 16, 

1909 * 
No. 950*120, Feb. 22, 1910 ; 
No. 958,137, May 17, 1910 ; 
No. 958,213, May 17, 1910 ; 



No. 962,068, June 21, 1910; , 
No. 965,310, July 26. 1910 ; 
No. 966,719, Aug. 9, 1910; 
No. 970.183, Sept. 13, 1910 ; 
No. 970,956, Sept. 20, 1910 ; 
No. 9n,329, Sept. 27, 1910; 
No. 971,933, Oct. 4, 1910; 
No. 972,437, Oct. 11, 1910 ; 
No. 973,113, Oct. 18, 1910 ; 
No. 973,748, Oct. 25. 1910; 
No. 974,483, Nov. 2, 1910; 
No. 984.549, Feb. 21, 1911 ; 
No. 989,296, April 11, 1911 ; 
No. 997,307, July 11, 1911; 
No. 997,936, July 11, 1911 ; 
No. 1,000,032, Aug. 8, 1911 ; 
No. 975,230, Nov. 8, 1910 ; 
No. 1,014,778, Jan. 16, 

1912; 
No. 1,014,779, Jan. 16, 

1912; 
No. 1.019.194, Mch. 5, 1912 ; 
No. 1,028.793, June 4, 

1912; _ 

No. 1,051,655, Jan. 28, 

1913 * 
No. 1,059,658, Apr. 22, 

1913; 
Other patents pending. 



and has the exclusive right to issue licenses, or sub-licenses, or other 
contracts or agreements, authorizing the manufacture, sale or use of 
anv or all the inventions aforesaid. . , , • j j 

ind whereas, , a corporation duly organized und^^^^ 

the laws of the State of , and having its principal o ffice and 

place of business at , County, m the State of ——, 

Lremafter denominated the party of the second part, ^^, ^^^^^omof 
acQuirinff a right to manufacture, sell and use " Pneumatic Stackers 
or machmes embodying any or all the said inventions or improve- 

""n^, therefore, this mdenture witnesseth, that for and in con- 
sideration of the s\mi of One Dollar ($1.00) m hand paid, the receipt 
whereof is hereby acknowledged, and of the various undertakmg. 
hereinafter expressed, the said party of the first part has licensed and 
empowered, and does hereby license and empower, the sp^ P^jty «t 
the second part, to manufacture, sell and use " Pneumatic Stackers 
embodying any of the inventions of any of the aforesaid Letters 
Paten/ownediy the said party of the first part or any reissues or 
extensions thereof until the full end of the terms of any and all said 
Otters Patent, or controlled by said party of the first part by means 
of any license or agreement so long as the licens^ or agreements re- 
latmg thereto are in force, to be used throughout the United States 
and the Territories thereof, said manufacture, sale and use to be upon 
the terms and conditions following, to-wit: i,«^^u„ 

1 The said party of the second part has agreed and does hereby 
aer^ to and with the said party of the first part, to pay to the said 
pirty of the first part a license fee or royalty of thirty dollars 
( S30 00> upon each and every machine, or attachment to a machine, 
embodying any of the above-mentioned inventions or improvements. 



EXHIBITS. 



301 



which may be made, sold or used by or for the said party of the 
second part, which said royalty shall become due and payable at the 
times of settlement hereinafter named; and said party of the first 
part agrees to make a discount of Three Dollars ($3.00) per stacker 
upon the royalty of Thirty Dollars ($30.00) to be paid by said party 
or the second part under said license, if and when said party of the 
second part shall promptly pay its royalties coming due under this 
license m cash upon the first day of January of each year, or within 
fifteen (15) days after demand therefor, during the continuance of 
this license. 

2. The said party of the second part further agrees to keep full, 
just, true and proper books and accounts concerning the manufacture 
and sale aforesaid, which shall be open to examination by the said 
party of the first part, or its duly constituted agents or representa- 
tives, during usual business hours, at all proper and reasonable times, 
and will render to the said party of the first part full and complete 
written reports on the last days of Jime and December of each year, 
under oath if required, showing a full account of all said " Pneumatic 
Stackers " which have been made or sold under this license and agree- 
ment ; at which said times said party of the second part also agrees 
to account for and pay over to the said party of the first part all 
amounts which have accrued as royalties hereimder : Provided^ how- 
ever, that the June settlements may be made by note at six months 
without interest : And provided, further, that all " Pneumatic 
Stackers" which the said party of the second part shall have re- 
maining on hand and unsold on the last day of December of each year 
shall be deducted from the account, and carried over to be accounted 
for in the next succeeding settlement. 

3. It is further agreed that each report rendered to the party of the 
first part by the party of the second part shall particularly state 
how many of each of the various distinctive kinds of "Pneumatic 
Stackers " hereby licensed to be made, have been made by or for the 
said party of the second part during the period covered by said 
report, so that the party of the first part may have a basis for ad- 
justment with the owners of such patents as it may hold or control 
by means of licenses. 

4. And whereas, the said party of the first part, for the purpose 
of preserving its legal rights, and of securing publicity of the fact 
that machines of this character are made under its authority, has 
designed labels of a peculiar sort (known as "transfers"), and as 
one of the conditions of granting license requires a set of three 
thereof, composed of one label bearing a list of patent dates and two 
medallions embodying the trade-mark of the said party of the first 
part, to be affixed to each and every "Pneumatic Stacker" made 
under its license or authority ; the list of patents in any convenient 
place, and the two medallions or trade-marks on opposite sides of 
the machine where they are conspicuously observable. Now, there- 
fore, the said party of the second part further agrees to and with 
the said party of the first part that it will procure (free of charge) 
from said party of the first part labels as above described, and attach 
or cause to be attached a set (3) of the same (in the manner herein- 
before stated) to each and every machine made and sold by or for 
the said party of the second part embodying any of the inventions 
of any of the aforesaid Letters Patent; fauing in which the said 






'I 



It 



302 



VikBM-MAGHnnBBY TRADE ASBOOIAlIOirS. 



party of tlie second part shall pay to the said party of the first part 
the sum of one hundred dollars ($100.00), as liquidated damages, 
now estimated, determined and agreed upon, and without relief, for 
and on account of each and every machine sold by or for said party 
of the second part without bein^ so marked or labeled with all the 
said transfers or labels herein and hereby required. 

5. And the said party- of the second part agrees to and with the 
said party of the first part that the selhng price to users of " Pneu- 
matic Stackers" embodying or including the inventions aforesaid, 
or either or any of them, shall be two hundred and fifty dollars 
($250.00) on time, (but to be fully paid for within two years from 
date of sale), or two hundred and thirty-five dollars ($235.00) in 
ca^ ; and the said party of the second part expressly agrees to and 
with the said party of the first part not to sell any such machine or 
machines to any person or party, other than an agent or dealer who 
buys the same to be sold ^S^^ who may have a discount of not to 
exceed twenty-five dollars ($25.00), or an established jobber of thresh- 
ing machinery who regularly buys at wholesale and retails through 
sub-agents, and who is regularly licensed as such by the said party 
of the first part under the aforementioned patents, who may have a 
discoimt of not to exceed seventy-five dollars ($75.00), at any less 
price or on any better terms than herein specified and agreed upon. 
And it is further expressly agreed that should there be any violation 
or evasion of this agreement, directly or indirectly, on the part of 
the said party of the second part, said party of the second part shall 

Say to tne said party of the first part the sum of one hundred 
ollars ($100.00) as liquidated damages, now estimated, determined 
and agreed upon, for each and every such violation or evasion hereof. 
This agreement is made for the purpose of effectually protecting the 
rights secured by the Letters Patent hereinbefore mentioned, which 
form the basis of this agreement, and the price so established em- 
bodies the license fee which it has been determined is fair and just 
to users of said patented inventions or improvements. 

6. The said party of tiie second part further agrees to and with 
the said party of the first part to take all orders for "Pneumatic 
Stackers" upon separate order blanks of a form approved by the 
said party of the first part, or as separate and distinct items of the 
orders when ordered in connection with other machinery. 

7. The said party of the second part, for and as a part of the 
consideration for tlie granting of this license, has expressly agreed, 
and does hereby agree, to ana with the said party of the first part, 
not to dispute, directiy or indirectly, the Letters Patent upon which 
this contract is founded, or any reissues thereof, nor make their 
alleged' invalidity a defense in any proceeding under this contract, 
or a jCToimd of refusing to make any payments called for hereby. 

8. The said party oi the second part further expressly agrees to 
and with the said wrtj of the first part, to mark each and every 
machine made by the said party of the second part with the marks 
required by the present patent laws of the United States, or any law 
hereafter enacted concerning the marking of patented articles, to 
preeerve any of the rishts of the patentee or patent owner. 

9. Tlie said party oithe first part, in consideration of the promises 
and agreemente herein containea, to it made by the said par^ of the 



• 



EXHIBITS. 



303 



second part, promises and agrees to prosecute all substantial infringe- 
ments of its rights, and of the rights of the parties hereto granted by 
the United States Letters Patent upon which these articles are based ; 

fand also to give to the said party of the second part the right to use 
all improvements made or acquired hereafter by said party of the 
first part upon or pertaining to " Pneumatic Stackers," without any 
additional royalty fee. It is, however, expressly understood and 
agreed that all patents and inventions relating to "Pneumatic Stack- 
ers," the title or control of which may hereafter be obtained or 
acquired by the said party of the first part, if used by the said party 
^ of the second part, shall be used under and subject to all the terms 
and conditions of this license and agreement, which it is hereby ex- 
pressly agreed shall apply to any and all such newly obtained or ac- 
quired patents and inventions. 

- 10. The said party of the first part further agrees to and with the 
said party of the second part that if it shall hereafter grant any more 
favorable terms in any license to build " Pneumatic Stackers " to be 
^ used in connection with machines for threshing grain than the terms 
" granted in these articles, either in amount of royalty or otherwise, 
to any person or corporation, that the same concessions shall upon 
like terms and conditions be made to the said party of the second 
part, and shall become a part of these articles. 

11. This license and agreement may be terminated at the option of 
the party of the second part at the expiration of the El ward Patent 
(Re-issued Letters Patent numbered 12,022, expiring December 10, 
1918), hereinabove mentioned, or at the option of the party of the 
second part may then be continued until the full end of the terms 
of each and all of the Letters Patent of the United States pertaining 
to " Pneumatic Stackers " herein recited owned by said party of the 
first part, or any reissues thereof, or for such less period as said party 
of the second part may elect, upon the terms and conditions in this 
agreement set forth, or upon such other terms and conditions as the 
parties hereto may then mutually agree upon. 

The rights, duties, privileges and obligations arising under or 

p-owing out of this license and agreement shall extend to and be 

binding upon the successors, assigns and legal representatives of the 

parties hereto respectively. 

Executed in duplicate. 

In Testimony Whereof, said The Indiana Manufacturing Com- 

Sany has caused these presents to be executed at Indianapolis, In- 
iana, this day of 191 — . 



Attest: 



The Indiana Manufacturing Company, 
By y President. 



In Testimony Whereof, said 
ents to be executed at , - 



-, this 



-, has caused these pres- 
— day of 191—. 



Attest: 



By 






I ■■ 



m\ 



II! 



Ill 



804 farm-machineby trade assooiatiohb. 

Exhibit 21. 

VOBM or PATENTS PTTBCHASB AGBEEMENT BETWEEN THE IH- 
BIANA MANXIEACTUBINO CO. AND LICENSEES. 

PATENTS PUHCHA8E AGREEMENT. 

Memorandum of an Agreement made between The Indiana ^n- 
UPACTURING Company, a corporation of West Virginia, having oflftces 
at Charleston, West Virginia, and at Indianapolis, Indiana, herein- 
after called the licensor, and , hereinafter called the 

licensee, Witnesseth : , * . x* 

Whereas, the licensor is sole owner of a large number of inventions 
and Letters Patent on " Pneumatic Stackers," respecting which the 
licensee has heretofore secured the right to make, use and sell all 
of said inventions or improvements, by written license from the 
licensor, now in full force; and, j j i 

Whereas, the licensor aims to encourage the invention and develop- 
ment of various improvements in "Pneumatic Stackers," and de- 
sires to purchase improvements or inventions and Letters Patent 
relating to " Pneumatic Stackers," and, under its exclusive control, 
seeks to vest the benefit thereof amongst its several licensees ; and. 

Whereas, the licensee desires to acquire for use m its business, the 
right to adopt and employ any one or more of the improvements 
aforesaid, held within control of the licensor only; 

Now, therefore, the parties hereto have severally agreed as follows, 

that is to say: ,. ^ ^ x x j- xi. 

I. During the term of the license at present outstanding, the 
licensee undertakes to faithfully keep and perform each and every 
of the following named conditions, viz. : 

a. To use reasonable efforts in the endeavor to improve upon 
Pneumatic Stackers, and, as often as may be, to promptly disclose 
unto the licensor full knowledge of the several improvements m 
Pneumatic Stackers from time to time coriiing within its notice and 

control. . , ., .^ _x 'J 

b. At expense of the licensor, and as often as it may request, said 
licensee is required to execute or cause to be executed the usual appli- 
cation papers and assi^ments deemed necessary to vest in said 
licensor the rights or privileges pertaining to such improvements in 
Pneumatic Stackers, thus including the Letters Patent of the United 
States and of the Dominion of Canada, or other foreign countries, 
now or hereafter issued and owned or controlled by the licensee, or 
in which it has or may later acquire an interest. 

IL So long as the licensee faithfully keeps and performs the 
conditions aforesaid, and each of them, respectively, the licensor on 

its part agrees: , . ., - , . 

c. To grant unto said licensee the right and privilege of making, 
using and vending, without extra charge, all and singular, the 
improvements acquired hereunder, or by other agreement of similar 
sort, made from time to time, with any other party or parties, and to 
give the licensee prompt notice of such acquirements. 

d. To pay unto said licensee the sum of Five Dollars ($5.00) on 
each and every wind stacker made and sold for attachment to thresh- 
ing machines and settled for at the royalty rate by said licensee, 
including aJl made and sold during 1908, ana thereafter. 






BXHIBITS. 



805 



^ 



in. Upon failure or refusal of the licensee to faithfully keep and 
perform the several conditions named in Article I hereof, or any of 
them, or material parts thereof, it is mutually agreed that this con- 
tract may be annulled at the option of the licensor, duly exercised 
on written notice given within thirty days next after expiry of a 
preliminary period of thirty days, allowed the licensee for proper 
correction of the delinquencies, called to its attention by written de- 
mand ; and no other or further penalty, or liability, shall be incurred 
by the licensee, through its failure or refusal to perform the several 
conditions named in Article I, except the cancellation of this con- 
tract, to take effect only in the future; and the payment made or lia- 
bility incurred by licensor under Clause d. Article II, prior to its 
cancellation shall not be withheld or recovered back by the licensor 
from the licensee. 

" Said licensee may also at its own option at any time cancel this 
contract by giving the licensor at least thirty (30) days written 
notice thereof and thereupon all rights and obligations of either 
party to the other under this agreement shall from said date cease 
and determine, and this contract be deemed to be canceled. 

In testimony whereof, said The Indiana Manufacturing Company 
has caused these presents to be executed at Indianapolis, Indiana, 
this day of , A. D. 1909. 

The Indiana Manufacturing Company, 

By , President. 



Attest: 



In testimony whereof, said 
to be executed at this 



Attest : 



day of 



-, has caused these presents 
, A. D. 1909. 



By 



Exhibit 22. 

FOBM OP EOTALTY BEPOBT REQUIRED OF LICENSEES OF THE 
INDIANA MANUFACTURING COMPANY. 



Form 60-10-1-12. 



ROYALTY REPORT (SEPARATOR). 



191- 






The Indiana Manufacturing Company, 

Indianapolis, Ind. 
Gentlemen :--The following is a full and complete report cover- 
ing all transactions relating to the manufacture and sale of pneu- 
matic STACKERS by the undersigned during the year 191 — , authorized 
by License Contract with your Company, together with a statement 
01 all " Transfers " handled during the same period. 

(Sign here) , 

Per ^-^-^ ^ 

68248'— 16 70 



|i^ 



806 



VABM-MAOHnnSRY TSLUm ASSOOUllONa 



EXHIBITS. 



807 



tit 





style of staokefB. 


DMi!i'l|41'Vik 


Gear- 










Oraod 
total. 


TMa] rnimlHir hnmfftit fluff wild from ifll-— ..ttt-t-t-^-- 


















Tnte^ miTP^^'i' vnftiiiilb^Hir«4 in VMT 101— ..-••■•■••-• - 


















* 


















Total to iMaooouiitod for .... 














T>«Mliipt niimf)#r (in hsiid. unflokl •••.••«t 












3 






•I •• ,,,. 


















• m 














Total to be deducted 














Total mnaber totMMtOid ^m, Jmmj 1,191—.. 














Tnlmt finmlMy rMTJud ftgwMil to Iffl*^ .•••••.*••■•••«» 

































e» 



SHOP lfT7MBEBS OF 8TACKEB8 OABBIED lOBWABD TO Itl- 



HBAn O* ABB* 





Kind of transfen. 


Desci iptif n 


Medal- 
Uam. 


Patent 
dates. 








Grand 
totaL 




















TmIaI nnmbflr reeohred in tlM vear m— ............... 




































Total to be sfTounted for. ...................... 


















Bedod number used on new Etacken in 101— 














« « 














• • 














m m 














Total to be deducted 
































1 









BOTALTT REPORT, THE INDIANA MANUPACTTJRINa OOMPANT, INDIAN- 
APOLIS. 



SHEirr NO. 



BT 



-, 1»1— . 



stacker number. 


Cos- 
tomer. 


Post 
ofBce. 


Stato. 


Style 

of 

stacker. 


Make 

of 


Num- 
ber of 
separa- 


8iE«. 




Cyl. 


Rear. 


1 


















2 








e 










3 


















4 


















5 


















61 




















1 1 1 









1 Original form proviles for 40 numbered entres. 

Exhibit 23. 
COmbtxtutiON and BY-LAWS OP THE NATIONAL FEDERATION OT 

implement and vehicle dealebs' associations. 

Constitution, 
article l — ^namb. 

This corporation shall be known as the National Federation of 
Retail^ Implement and Vehicle Dealers' Associations, and under 
such name mall its business be conducted and transacted. 

ARnCLB n. — LOCATION. 

Its domicile shall be Kansas Citv, state of Missouri, but its corre- 
spondence may be conducted, bulfetins issued, and other necessary 
business transacted at the office of the Federation secretary, wherever 
that may be. 

ARnCLB m. — OBJECT. 

The object for which this Federation is formed is to supply its 
constituent associations and their members with any and all legal 
and proper information which may legitimately come into its pos- 
session, and which may be of interest or value to the same. 

ABnCLB IV. — ^MEMBERSHIP. 

The members of this Federation shall consist of the several con- 
stituent associations, by their accredited representatives, as provided 
for in Section 5 of the By-laws hereto attached. 



Pom 01, io-is>i8» 



* At the ananal meeting in October, 1914. the word " Retail " was eliminated. 



i 



IpfH 



I 



808 



7ABM-MACHINE&T TEMM ASSOCIATIOKa 



ABTlCIiB v.— OFFICaBM. 



309 



The affairs of this Federation shall be man^d by an Official 
Board consisting of a President, Vice-president, Secretary-treasurer, 
and six Directors. The Secretary-treasurer shall be elected at the 
first meeting of tiie Official Board for a period of one year. The 
others shall be elected by the annual meeting, the President and Vice- 
president for one year, the directors first time, two for one year, two 
for two years, and two for three years, thereafter two annually for 
a term of three years; provided, however, that any officer or Director 
shall serve until his ipiccessor shall be elected and qualified. 

▲BTICLE VI. — DUTIB8. 

The duties of the several officers shall be such as usually devolve 
upon like officers in similar positions, and the Secretary-treasurer 
shall perform such special duties as are assigned him by the Official 
Boara. Should a vacancy occur the Official Board shall have au- 
thority to elect someone to fill the same, who shall serve until the 
neadi regular or special meeting of the Federation. 

ARTIGLB Vn. — MMBrrSQS. 

» 

The Federation shall hold an annual meeting at such time and 

Slace as the Official Board or Executive Committee may each vear 
etermine. Special meetings shall be called by the President when- 
ever a majority of the Official Board may request the same. The 
Cifficial Board shall meet as soon as practicable after the close of the 
annual meeting. Other meetings shall be called by the President on 
request of a majority of the Board or of the Executive Committee. 
A quorum for the annual meeting shall be ten, of the Official Board 
five, and of the Executive Committee two. 

AimCLE Vm. — ^AMENDMENTS. 

The by-laws or oonsfcitution may be amended from time to time by 
a majority vote of the delegates present at any annual meeting, «r 
at any special meeting if ten days' written notice of the pro^)sed 
change shall have been given. Or, in case of emergency, the Official 
Board shall have authority to ainen<L and such amendments shall 
iHaid until the next annual meeting of the Federation. 

• ABTIGLE H. — EXECUTIVE OOMMITTEB. « 

The President, Vice-President and Secretary-treasurer shall ex- 
officio constitute an Executive Committee, which shall act during 
the interim between meetings of the Official Board, and during such 
time said committee shall have and exercise the full power and au- 
thority of the said Board, and its acts shall stand and be in effect 
until the next meeting of the Offidal Board or of the Federation. 
The Executive Committee shall meet on call of the President, or of 
the Seawtary, when in the judgment of either the interests of the 
Federation require. 



O 



By-laws. 



SECTION 1. 



It shall be the duty of the Secretary, on order of the Official Board, 
to receive and file for the information of the constituent associations 
and their members all such legal and proper information as shall 
be transmitted to this Federation by and through its members, but 
no such information or bulletins shall be disseminated imtil the same 
shall have been considered and approved by the Official Board or the 
Executive Committee, either in session or by correspondence,^ 

SEcrnoN 2. 

It shall be the duty of the Secretary quarterly, or as often as the 
Official Board may deem advisable, to issue a bulletin to the con- 
stituent associations and their members. 

SEC5TI0N 8. 

When and so often as such bulletins shall be ordered by the Official 
Board of this Federation it shall be the duty of the Secretary to 
publish and disseminate the same. 

SECTION 4. 

It shall be the duty of each constituent associaticm, through its 
secretary, to supply a corrected list of the members in good standing 
of said association, to the Secretary of the Federation, whenever and 
so often as tiie same shall be corrected and published. 

SECTION &. 

Any retail Implement and Vehicle Dealers' Association which 
shall have accepted the constitution, by-laws and rules of this Feder- 
ation, and shall have provided for the payment of the sum of forty 
cents (40^) per annum for each member in good standing in said 
association on the first day of October next preceding (payable as 
soon as possible after the annual meetings of the several associations) 
toward the expenses of this Federation, shall by virtue of the same, 
become a member or constituent association of this Federation, and 
shall be entitled to representation in annual and special meetings of 
the Federation on the basis of one delegate for each one hundred 
members, or fraction thereof exceeding fifty, on which said associa- 
tion pays per capita tax. And all members in good standing of said 
constituent association, shall by virtue of the payment as above de- 
scribed, be entitled to all bulletins, correction sheets, or other infor- 
mation published by said Federation, which shall be designed for the 
information of members, and to call upon the officers of said Feder- 
ation at all times for any special information which it may be in 
their power to give; provided, however, that if the legitimate ex- 
penses of the Federation for any year be f oimd to exceed the amount 

^ItaUcized words in ink in copy. 



810 



FABM-MAOHDmr —*"■ ASSOOUHOKB. 



EXHIBITS. 



811 






>i| 



m 



b 



f 



realized from the per capita tax of forty cents (4(V) per member, 
then the deficit shall be paid by the several constituent associations 
pro rata in proportion to the number of members in good standing 
on the first of October next preceding, as aforesaid, except that in 
no case shall any association be asked to pay over twenty cents (2(V) 
per member in a^ddition to the per capita tai of forty cents (40^) prcH 
¥ided for in this section. 

SECTION e. 

No officer of this Federation shall receive any salary except the 
Secretary, who shall be paid such salary as may oe fixed by the Offi- 
cial Board. But each member of the Official Board shall be entitled 
to have his necessary expenses paid when attending meetings or 
acting under the instruction of the Board, provided, however, that 
no member or members of the Official Board from any one association 
shall be allowed a greater amount for expenses than will equal the 
amount paid by sam association toward the expenses of the Feder- 
ation. Any additional expenses over that amount, as well as expenses 
of delegates who are not members of the Official Board, must be 
borne by the individual or his own association. 

BBCnON T. 

The Official Board shall take such action as may be deemed neces- 
sary or advisable in regard to inspecting and auditing the books and 
accounts of the Secretary-treasurer, and safeguardi]^ the funds of 
the Federation. 

ExHinrr 24. 

CONSTITUTION AND BT-LAWS BECOMMENDED IN 1004' BY THE 
NATIONAL FEDBBATION 07 IMPLEMENT AND VEHICLE ASSO- 
GZATIONS FOB AIXIFTION BY CONSTITirBNT ASSOCIATIONS. 

CONSTTTUnON. 
DECUIBATION OF PURPOSE. 

We realize the convenience, if not necessity, of the retail imple- 
ment, vehicle and hardware dealer to every community, and we are 
interested in the promotion of the general welfare and the perpetua- 
tion of the retail implement, vehicle and hardware business. 

We recognize the absolute right of every person, partnership or 
corporation to establish and maintain as many retail stores as he, 
the vj or it may see fit.' 

We recognize the legal right of the manufacturer and wholesale 
dealer in implements, vehicles or hardware to sell implements, vehi- 
cles or hardware' in whatever, market, to whatever purchaser, and 
at whatever price they may see fit 

' ^ CliftiiKes subsequently recommended bj tbe Federation are Indicated In tbe footnotes to 
this ezlilbit. 

*At tbe meeting of tbe National Federation In October, 1910, It recommended, by 
unanimous rote, tbat tbls paragraph be omitted and that each constituent association 
take prompt action in executive session on tbe matter. (See pp. 160, 161.) 

• In tbe cony of tbe constitution furnished tbe Bureau of Corporations a line has been 
dfawn through the words " implements, Tehleies or hardware." 



We also recognize the disastrous consequences which result to the 
regular retail implement, vehicle and hardware dealer from direct 
competition with wholesalers and manufacturers, and appreciate the 
importance to the retail dealer of accurate information as to the 
nature and extent of such competition where any exists. 

And, recognizing and appreciating the advantage of co-operation 
in securing and disseminating any and all proper information for 
our mutual convenience, benefit or protection, we have organized this 
association, and have adopted the following articles for the govern- 
ment of our affairs. 

▲BnCLES OF ASSOCIATION. 



Abtice I. — Name. 
The name of this organization shall be - 



Abtiole IL — The Ohiect 

The object of this association is and shall be to secure and dissemi- 
nate to its members any and all legal and proper information which 
may be of interest or value to any member or members thereof in his 
or their business as retail implement, vehicle or hardware dealers. 

Abtiole III. — Limitations and Restrictions, 

Section 1. No rules, regulations or by-laws shall be adopted in any 
manner stifling competition, limiting production, restraining trade, 
regulating prices, or pooling profits. 

Sec. 2. No coercive measures of any kind shall be practiced or 
adopted toward any retailer, either to induce him to join the asso- 
ciation, or to buy or to refrain from buying of any particular manu- 
facturer or wholesaler. Nor shall any discriminatory practices on 
the part of this association be used or allowed against any retailer 
for the reason that he may not be a member of the association, or to 
induce or persuade him to become such member. 

Sec 3. No promises or agreements of any kind shall be requisite to 
membership in this association, nor shall any penalties be imposed 
upon its members for any cause whatsoever. 

Abticlb IV. — Membership. 

Sec. 1. Any person, firm or corporation regularly engaged in the 
retail implement, vehicle or hardware trade, carrying an assorted 
stock of implements, vehicles or hardware reasonably commensurate 
with the demands of his community, shall be considered a regular 
retail implement, vehicle or hardware dealer, and be eligible to mem- 
bership in this association. 

Sec 2. The membership fee shall be dollars ($ ), 

payable in advance, and this fee shall cover the dues for one year 

from date of certificate. The annual dues thereafter shall be 

dollars per year. 

Betail dealers having more than one store shall be considered as 
members only at points for which they have taken memberships. 

Sec 3. The membership fee and annual dues, as provided in the 
preceding section, when paid, shall entitle the party to membership 



II 



II 



I 



312 



FABM-MAOHIKEBT TRADE A8S00IATI0KB. 



and to all the rights and privileges of this association to the end of 
the year for which such dues are paid, and no longer; but member- 
ship may be renewed for each successive year by the pre-payment of 
the annual dues for any such year, unless the board of directors shall, 
for cause, determine mat the party is undesirable, or ineligible to 
membership. 

Sec. 4. Any member may withdraw from membership in this asso- 
cisliQn at any time by giving written notice to the secretary of such 
wiliidrawal, and by surrendering his certificate of membei-shap. Any 
member going out of the retail miplement, vehicle or hardware busi- 
ness which entitled him to membership^ shall be deemed to have 
withdrawn from membership. 

Sec, 5. Any member withdrawing from membership, or ceasing to 
be a member for any reason, shall not be entitled to refund of mem- 
bership fee, or of any annual dues, or any part thereof, but the same, 
and the whole thereof, shall belong to the association absolutely. 

AsnoLi y. — Officers and their 4uHe»,* 

Sec. 1. The affairs of this association shall be managed by a presi- 
dent, vice-president, and a board of directors, including the 

president, vice-president and secretarjr, who shall be ex-officio mem- 
bers thereof. The president and vice-president shall be elected 
annually. Tlie balance of the directors ^all be elected as follows: 
One-half for one year and one-half for two years, and one-half to 
be elected yearly thereafter, to hold office for the term of two years; 
all officers to be elected by ballot. It shall be the duty of the presi- 
dent, or, in his absence, the vice-president, to preside at all meetings 
of this association. The directors shall have the power to hold meet- 
ings at such times as they may deem proper, to make or amend 
by-laws for carrying into effect the objects of this association; to 
appoint committees ; to print and circulate documents in the interest 
of this association; to disbui^se the funds of this association; to 

> In tbe copy of thp constitution furnished to tbe Bartaa of Corpontions, a line has 
been d»wn throai;h the words •' 'etail imi»k>ment. vehicle or hardware" in this para 
gnpb, and tlie words " wMcli entitled him to membership " are inserted in pencil on the 

Ma rgin. 

« Snbseouently Articles V and VI were consolidated. Article V of the present constitu- 
tioa of the Western Retail Implement Vehicle & Hardware AssociaUon furnished the 
Bureau reads as follows : 

AsTicLX V. — OfUcen and Their Dutiea. 

8«c. 1. The aflFairs of this Association shall be managed by a Board of Director! 
consisting of a President, Vice-President, Secretary-Treasurer, and eight (8) Directors. 

Sec. 2. The President and Vice-President shall be elected annually. The Directors 
ahaU be first elected as follows : Two for one year, two for two years, two for three 
jmars, and two for four years; thereafter two Directors shall be elected annually for 
a ^rm of four years. Above named Officers and Directors to be elected by ballot. 
The Secretary-Treasurer shall be elected by the Board of Directors, as hereinafter pro- 
Tided. The Officers and Directors shall serve until their successors are elected and 
duly qualified. _ 

Sbc. 3. Executive Comwtitiee. — The President, Vice-President and Secretary, ex- 
ofBcio, are constituted the Executive Committee of this Association. In all matters 
relating to reports made by this Association between the sessions of the Board of 
Directors, the said Committee shall have the same powers as those conferred upon 
the said Board of Directors. Upon the request of the Secretary, said Committee shall 
convene to determine such matters as are not clearly defined by the Articles of Asso- 
ciation, or such other questions as he deems of great importance to the Association. 

8bc. 4. Pretiding Officers. — It shall be the duty of the President, or in his absence. 
the Vice-President, to preside at all meetings of this Association, and of the Board of 
Directors, or Executive Committee. 

Sec. 5. Auditing Committee. — The President shall immediately preceding the annual 
■laeting, appoint a committee of two from the membership and one from the Board to 
examine the accounts of the Secretary-Treasurer and report at said meeting. 

8bc. 6. Board of Directora. — The Board of Directors shall have power to hold meet- 
at such times as they may deem proper ; to make, or amend by-laws for carrying 



i 



EXHIBITS. 



313 



employ a suitable person as secretary, at such salary as in their 
judgment will be for the best interests of the association; and de- 
vise and carry into execution such other measures as they may 
deem proper to promote the welfare of this association. All resolu- 
tions of the board of directors may be authenticated by the signature 
of the president and the countersignature of the secretary. The 
directors shall be paid their necessary expenses in attendance upon 
meetings of the board, or acting under the instructions of the board. 

Election of Secretary-Treasurer. 

Sec. 2. It shall be the duty of the board of directors after each 
annual meeting to elect a secretary-treasurer for the term of one 
year, who shall give bond to be approved by the board of directors, 
for the faithful performance of the duties of his office. They shall 
fix his salary; but such salary shall not be in excess of the sum 
which said board may reasonably expect to receive from the mem- 
berships of this association. 

Duties of Secretary-Treasurer, 

Sec. 3. Upon election, the secretary shall become a member of the 
board of directors, to serve during his term of office, and to have a 
full voice in the management of the affairs of this association, dur- 
ing the time which he may serve. 

It shall be the duty of the secretary-treasurer to keep the minutes 
of this association, and to keep a strict account of all moneys belong- 
ing to the association. He shall make an itemized report at each 
annual meeting of the business of the previous year. 

The secretary shall notify each member of this association of the 
annual or special meetings at least ten days previous to such meeting. 

The board of directors shall prescribe and determine what other 
service he shall give to the association during the term of his office. 

Into effect the objects of this Association ; to appoint committees ; to print and circu- 
late documents in the interest of this Association ; to disburse the funds of this 
Association, and devise and carry into execution such other measures as they may 
deem proper to promote thi welfare of this Association. All resolutions of the Board 
of Directors may be authenticated by the signature of the President and the counter- 
signature of the Secretary-Treasurer. 

Sac. 7. Examining Books. — The Board of Directors shall examine the books of the 
Secretary-Treasurer as often as they may deem necessary, and if they shall find any- 
thing not satisfactory to themselves, they shall at once report the same to the Presi- 
dent, who shall have power to remove the Secretary -Treasurer with consent of the 
Board. 

Sec. 8. Vacancies. — Should a vacancy occur in any of the offices of this Association. 
the Board of Directors shall appoint a successor to serve until the next annual 
meeting. 

Sbc. 9, Election of Secretary-Treasurer. — It shall be the duty of the Board of 
Directors after each annual meeting to elect a Secretary-Treasurer for the term of one 
rear, who shall give good and sufficient bond, to be approved by the Board of Direc- 
tors, for the faithful performance of the duties of his office. They shall fix his 
salary ; but such salary shall not be in excess of the sum which said Board "may 
reasonably expect to receive from the memberships of this Association. 

Sac. 10. Duties of Secretary-Treasurer. — Upon election, the Secretary shall become 
a member of the Board of Directors, to serve during his term of office, and to have a 
full voice in the management of the affairs of this Association, during the time which 
be may serve. 

It shall be the duty of the Sccretarv-Treasurer to keep the minutes of this Associa- 
tion, and to keep a strict account of all moneys belonging to the Association. He 
shall make an itemized report at each annual meeting cf the business of the previous 
year. 

The Secretary shall notify each member of this Association of the annual or special 
meeting at least ten days previous to such meeting. 

The Board of Directors snail prescribe and determine what other service he sliaU 
five to the Association during his term of office. 



\w 



II 



814 



VABM-MAGHINBBY TRADE ASSOCIATIONS. 



BmecuUve Oommitiee, 



Sec. 4. The president, vice-president and secretary, ex-officio, are 
constituted the executive committee of this association. In all mat- 
ters relating to reports made by this association between sessions of 
the board ol directors, the said committee shall have the same powers 
as those conferred upon the said board of directors. That upon the 
request of the secretary, said committee shall convene to determine 
such matters as are not clearly defined by the articles of association 
or such other questions as he deems of great importance to the asso- 
ciation. 

Abticlb Yl.— Duties of Olflcer$,^ 

Sec. 1. Presiding Officer. It shall be the duty of the president, or, 
in his absence, the vice president, to preside at all meetings of this 
association, or its board of directors. In the absence of both presi- 
dent and vice president, the directors in order of their seniority shall 
preside. 

Sec. 2. Vice President In the absence of the president the vice 
president shall perform the duties of the president. 

Sec. 3. Directors, It shall be the duty of the board of directors, 
after each annual meeting, to elect a secretary-treasurer for a period 
not exceeding one year, on such terms as may be agreed upon. 

The directors shall examine the books of the secretary-treasurer as 
often as they mav deem necessary, and if they shall find anything not 
satisfactory to themselves, they diall at once report the same to the 
president, who shall have power to remove the secretary-treasurer 
with consent of the board oi directors. 

The president shall immediately preceding the annual meeting 
appoint a committee of two from the membership and one from the 
board to examine the accounts of the secretary-treasurer and report 

at said meeting. 

Should a vacancy occur in any of the offices of this association, the 
board of directors shall appoint a successor to serve imtil the next 
annual meeting. 

The board of directors may make such bj-laws, not inconsistent 
with the provisions of the foregoing declaration of purpose and these 
articles, as to them may seem necessary and practicable for the proper 
management and conduct of the affairs of this association. 

Sec. 4. Secretary-Treasurer. It shall be the duty of the secretary- 
treasurer to keep safely all moneys of the organization received by 
him from any source, and pay out the same on consecutively num- 
bered vouchers, approved by the president and attested by him as 

secretary. He shall give a bond in the sum of Dollars, 

(J — I ) to be approved by the board of directors. 

He shall keep the minutes of the meetings of this organization and 
of the board of directors, and keep a strict account of all moneys 
belonging to the same. He shall make a report at each annual meet- 
ing of the work of the previous year. 

The secretary shall notify each member of the annual and special 
meetings at least ten days previous to such meetings. 

The board of directors shall prescribe and determine what other 
service he shall give to the organization during the term of his office. 

1 See footnote on v». S12-313. 



/ 






i 



EXHIBITS. 



Abticlb Vll.— Reports io Secretary.* 



315 



Sec. 1. Any member of this association having knowledge of a 
sale by a manufacturer or wholesale dealer or his agents to other 
than a regular dealer within the territory of such member, may 
notify the secretary of this association in writing, giving as full 
information in reference thereto as practicable, such as date or dates 
of shipment and arrival, original point of shipment, names of con- 
signor and consignee, and such other particulars as may be obtain- 
able. 

Such notice, if filed at all, must be sent, with or without informa- 
tion in detail, within a reasonable time after receipt of shipment at 
point of destination, and no notice shall be filed of any such sale or 
shipment occurring within fifteen days after date of said member's 
'Certificate of membership. 

Upon receipt of such written notice, the secretary shall imme- 
diately verify such report so far as practicable. 

Sec. 2. Ail sales or shipments made to other than regular dealers 
by commission merchants, agents or brokers, shall be considered as 
though the same were made directly by the manufacturer or whole- 
saler from whom such commission merchants, agents or brokers 
secure such goods or shipments. 

Sec. 8. Each member, when he joins this association and once 
each year thereafter (and oftener if the board of directors shall re- 
quest it) is expected to furnish the secretary, when called upon to 
do so, a list of those manufacturers and wholesalers and agents, 
from whom he buys. 

AbtioiiB Ylll.— Meetings, 

Sec. 1. Annual. The annual meeting of this association shall be 
held at such time and place as the board of directors may determine. 

Sec. 2. Special. Special meetings of this association may be called 
by the board of directors when in the opinion of the board such 
meetings are necessary. 

Sec. 3. Notice. Members shall be notified by mail of annual and 
special meetings at least ten days previous to such meetings. 

Abticlb IX. — Compensation of Officers. 

All officers and directors of this organization shall be entitled to 
have their necessary expenses paid when attending meetings, or 
acting under the instructions of the board. 

Abticlb X. — Quorum. 

A quorum of this organization for the transaction of business shall 
be a majority of its board of directors. 

Abticlb XI. — Am^endments. 

Amendments to these articles may be made at any regular meeting, 
or special meeting called for that purpose, by a vote of at least two- 
thirds of the members present and voting. 

*At the meeting of the National Federation In October, 1910, it recommended, by 
unanimous vote, that sections 1 and 2 of this article be omitted from the constitution of 
each constituent association. Each of the latter was adylsed to take prompt action in 
•iMcatlTe aeaaion on the matter. (See pp. 160, 161.) 



; i 



816 



FABM-MAOHIKESY TBADB ASSOCIATIONS. 



In case of necessity, of which the board of directors shall be the 
sole judge, such board may amend these articles, and such amend- 
ment shall hold good until the next following meeting of the asso- 
ciation. 



Exhibit 25. 

TTNIFOBM ABTICLES 01* ASSOCIATIOir BECOMMENDED BY NA- 
TIONAL EEDEKATION OP IMPLEMENT A VEHICLE DEALEBS' 
jynOGIATIONS FOB ADOPTION BT LOCAL CLUBS OF DEALEBS. 

« 

Articles and By-Laws op Local Club, Number — , of Association 



Adopted 



PREAMBLE. 



191- 



We acknowledge the interest and value to the retail dealers of the 
State Associations and the Federation, and yet we realize the need 
of a closer and more personal community of interest among the 
Betail Implement, Vehicle and Hardware Dealers in our own terri- 

Believing that the intimate association in a social club will induce 
a more cordial and friendly feeling among us, thereby avoiding 
Srtrife and enabling us to be mutually helpful to one another in mat- 
ters of Credits, Cx)llections and Reduction of Operating Expenses, 
we have adopted the following Articles for the regulation of our 
Local, and cordially invite the regular Implement, Vehicle and Hard- 
ware Dealers of this section. to join with us and participate in the 
pleasures and benefits of our social organization. 

CLUB articles. 



Abticlb I. — Name. 

This Chib shall be known as Local Number — of 



Abticli n.— Od/ec*. 

Its object shall be social enjoyment and entertainment, together 
with such benefits in a business way as will naturally be brought 
about by a feeling of fraternity and good fellowship among its 
membership. 

AsncLB III. — TerrUonf. 

The territory proper of this Local shall be in the 

g^l^ 0f J though dealers in adjoining territory may be re- 
ceived on same terms and conditions if they desire to do so. 

AsncLi tV.—Be8tfiction. 

No Article or By-Laws shall be adopted which will conflict with 
the regulations of the constituent association under which this Club 
IB OTgmized, nor with those of the National Federation of Betail 



i 



XXHIBIT8. 



317 



Implement and Vehicle Dealers' Associations, of which it is a 
membw. 

Abtiou Y.—MembersMp, 

Section 1. Any person, firm or corporation engaged in selling at 
retail Agricultural Implements, Vehicles or Hardware, maintaining 
a regular place of business, and carrying on hand at all times a stock 
of goods reasonably sufficient for the territory where located, shall 
be considered a regular dealer and eligible to membership in this 

club. 

Section 2. The membership fee shall be dollars, payable 

in advance, which shall cover the dues for the first year. The 
annual dues thereafter to be dollars per year. 

Section 3. Signing these Articles and payment of membership fee 
* shall entitle an applicant to full membership, unless objection be 
made, in which case a majority vote of members present shall be 
required to elect. 

Section 4. Any member may be expelled bv a majority vote, or 
may withdraw at any time by surrendering his membership card. 
Also anyone going out of the business which made him eligible shall 
be considered as withdrawn. 

AimcLB VI. — Officers and their Duties, 

Section 1. The affairs of this Club shall be conducted by a Presi- 
dent, Vice-President, and a Secretary-Treasurer, who in addition to 
performing the usual duties of such office, shall, ex-officio, constitute 
an Executive Committee, which shall have and exercise the full 
authority of the Club in the interval between meetings. 

Section 2. The President, by and with the consent of the Club, 
or of the Executive Committee, shall appoint standing committees 
of three members each on Entertainment, Grievance, and Credits and 
Collections. 

Section 3. The Entertainment Committee, under general direction 
of the Club or Executive Committee, shall be charged with the duty 
of planning and providing suitable entertainment, literary or other- 
wise, for the various meetings of the Club. . 

Section 4. The Grievance Committee shall be expected to investi- 
gate and adjust smj difference arising between members of the Club, 
and anyone continuing to remain a member shall be expected to abide 
by the decisions of the Grievance Committee, subject, however, to 
an appeal by either party to the Club or Executive Committee. 

Section 6. The Committee on Credits and Collections shall from 
time to time devise and submit for the approval of the Club, such 
plans as in their judgment may be for the best interest of the mem- 
bers along this line, and shall perform such other duties as may be 
assigned them by the Club or Executive Committee. 

Section 6. AH officers and standing committees shall hold their 
office for one year, or until their successors are elected and qualified. 

Abticle VII. — Meetings. 

Section 1. Kegular meetings shall be held as the Club may from 
time to time direct, but special meetings may be held at any time or 



H 



tit 
ill 

II 

II 
I 



|| 



il 



318 



VABM-MAOHnnSBY TRADE ABSOOIATIOKa 



I>lace on call of the President, or of any two members of the Eiectt- 
tive Committee. 

Skction 2. Any number of members shall constitute a quorum for 
the transaction of business, except where an expulsion or an appeal 
is to be considered, without previous notice to members of such pro- 
posed consideration, in whicn case a majority of the Club members 
must be present to make such decision binding. Two shall constitute 
a quorum of the Executive Committee at any time. 

AixiGLE YJII.—BihLawa ami Amendmaiilt. 

Sectiok 1. The Club or the Executive Committee may enact from 
time to time such By-Laws as may be found necessary &r the carry- 
ing out of the provisions of these Articles. 

SBcnoN 2. The Club Articles or the By-Laws may be amended by 
a two-thirds vote at any regular meeting or special meeting of the 
Oub, provided a majority of the members are present, or that reason- 
able notice had been given the members of sach proposed changiw 



ExHiBrr 26. 

HUKBEB 07 MEMBERS Q g RETAIL I MPLEMENT DEALERS' ASSO- 
CIATIONS AFFILIATED WITH THE NATIONAL FEDERATION OF 
IMFLEMENT A VEHICLE DEALERS' ASSOCIATIONS, 1001-1913.' 



Name of usodatkm. 


iffn 


1902 


1903 


1904 


1905 


1906 


1907 


Western B«tail Implenieiit, Vehicle & Hard- 
wan Assodatkni 


1,000 

240 
230 

100 


1,100 

331 
120 

UO 


1,100 

306 
1ft) 

180 


1,300 

100 
333 


1,3S0 

68 
340 


1,360 

36 
386 


Laoo 

87 
340 

188 

IT7 

106 
180 

190 

98 


Nebraska & Western Iowa Retail Imptomeat 

DflalflTs' A.'wociatioii 


Iowa Implement Dealers' Assodatfon 

Tri-State Vehicle A Implement Dealers' Asso- 
dation 


Michigan Retail Implement & Vehicle Deal- 
ers' Association 




90 

110 
119 

130 


160 
110 

m 

136 


Minnesota Retail Implement Dealers' Aasoeia- 
tlon 










Texas Hardware A Implement Association . . . 
Illinois Retail Implement Dealers' Associa- 
tion 


143 
107 


IGO 
107 


100 
100 


396 
80 


Wisconsin Retail Implement it Vehide DeaU 
ers' Association 


Betafl Implement Dealers' Assoeiatkm of 
South Dakota, Southwestern Minnesota 
A Northwestern Iowa 


137 


Ul 


147 


336 


136 


104 


If 

71 


Colorado Retail Hardware A Implement As- 
soeiatian 


North Dakota A Northwestern Minnesota 
Implement Dealers' Association... 








lOS 

63 
176 

88 


166 
44 


106 
4S 


n 


The 'Oklahoma Retail Hardware A Imple- 
ment Dealers' Association 




19 
280 


10 
310 

83 


86 


Eastern Vehicle Dealers' Association 




Bonthwestem Kansas A Oklahoma Assocbk- 
tion 










Rloe Belt Association 






8 


U 


18 


Montana Implement Dealers' Assodatlmi 


22 
























Total 


1,0S» 


2,378 


3,455 


3,574 


3,335 


3,366 


3,756 





« 



'KJI 



# 



^ 



.1 






319 



Vmiiber of members of retaU implement dealers* associations afJUiated toith the 
National Federation of Implement d Vehicle Dealers' Associations, 1901- 
ISlS—ConUnued. 



Name of association. 


1908 


1909 


1910 


1911 


1912 


1913 


Western Retail Implement, Vehicle A Hardware As- 
sociation 


1,400 
260 
188 

210 
105 
150 
214 

114 


1,400 
325 
300 

307 
128 
125 
232 

200 
60 

85 
90 

35 

88 

60 


1,400 
350 
400 

400 
200 
350 
250 

250 
100 

175 
150 

35 

75 

60 


1450 
400 
450 

375 
200 
350 
250 

175 
125 

200 
125 

100 

100 


1,600 
450 
450 

350 
275 
850 
200 

200 
225 

200 
200 

125 

100 


1 000 


Iowa Implement Dealers' Association 


fiTS 


Trl-State' Vehicle & Implement Dealers' Association.. 
Michigan Retail Implement A Vehicle Dealers' Asso- 


400 

am 


Minnesota Retail Implement Dealers' Association 

Texas Hardware A Implement Association 


600 


Illinois Retail Implem^t Dealers' Association 

Wisconsin Retail Implement A Vehicle Dealers' Asso- 
ciation. 


150 


Mid- West Retail Implement Dealers' Assocbtion 


350 


Retail Implement Dealers' Association of South Da- 
kota, Southwestern Minnesota A Northwestern Iowa. 

Colorado Retail Hardware A Implement Association. . 

The Mississippi Valley Implement A Vehicle Dealers' 
Association 


124 

74 


100 
100 

100 


N(»th Dakota A Northwestern Minnesota Implement 
Dealers' Association 


100 
60 


ISO 


The Oklahoma Retail Hardware A Implement Deal- 
ers' Association 




Vlr^taJa A North Carolina Retail Implement, Machin- 
ery & Vehicle Dealers' Association*. 




50 
50 


50 


New York State Retail Implement A Vehide Dealers' 
Association 




48 


50 


50 


50 


Fennsylyania A New Jersey Retail Implement A Ve- 
hicle Dealers' Association 




100 
















Total 


2,999 


3,492 


4,245 


4,350 


4,725 


5,126 





I Tba Faeifle Northwest Hardware A Implnttent Assodation and the Montana Implement Dealers' 
Aaoeiattan ww repmoited by thair seoretarte as ddegates in tha annual oanyentlon v Oet U, 14. and 
lifltM. 



Exhibit 27. 

CARD ENTITLED "SIMPLE SUGGESTIONS ON COST FIGURING," 
ISSUED IN DECEMBER, 1909, FOR INFORMATION OF DEALERS.' 

First, Charge interest on the net amount of your total investment 
' at the beginning of your business year exclusive of real estate. 

Second, Charge rental on all real estate or buildings owned by you 
and used in your business at a rate equal to that which you would 
receive if renting or leasing it to others. 

Third, Charge in addition to what you pay for hired help, an 
amount equal to what your services would be worth to others, also 
treat in like manner the services of any member of your family em- 
ployed in the business not on your regular pay roll. 

Fourth, Charge depreciation on all goods carried over on which 
you may have to make a less price because of change in style, damage 
or anv other cause. 

Fifth, Charge depreciation on buildings, tools, fixtures or any- 
thing else suffering from age or wear and tear. 

Sixth, Charge amounts donated or subscriptions paid. 

Seventh, Charge all fixed expense, such as taxes, insurance, wat^r, 
lights, fuel, etc. 

Eighth, Charge all incidental' expense such as drayage, postage, 
office supplies, livery or expense of horses and wagons, telegrams and 
telephones, advertising, canvassing, etc. 

> Itallciied words In this exhibit were printed in black-face type in original. 







f Hi 



)ll 






I 



i 



380 



FABM-MAOHINBBT IIUDB ASSOOIATIOire. 



Ninth. Charge losses of every character including SP°^^}^?' 
sent^t and not charged, alWances made customers, bad debts, etc 

Tenth. Charge collection expense. 

Eleventh. Charge anv other «»?««»« not «»"'«« J**?;^,?^ J^. _-^_ 

Twelfth. When you have ascertained the sum of all the foregoing 
itemTprove it by your books, and you will have your total expense 
fSe^Jelr, ttien Lide this'figureV the total ojf your sales and it 
will show the per cent which it has cost you to do busing. 

Thirteenth. Ifi^^ this per cent and deduct it from the pnce of ai^ 
nrticle vou have sold, then subtract from the remainder what it cost 
you (i/voirprice .id freight) and the result will show your net 

"^'tZ^h^^olT^. selling prices of the various articles you 

'^'^^rfAtt^rseS^ri^Sbe™^ 
take the total expensed of the old year and divide this by the total 
S your p^chases for the old ye»r^(mvoice .price and Wht) and 
the result wUl be the per cent to add to invoice and freight to cover 
S^^, thm add youfprofit and you have your selling pnce. 



Exhibit 28. 

CoBT Educationai, A880ciation-£ompo8H) or Manotactotbrs, 
^BBEBS, Rktau, Mebchanm, Trade Papebs and Tbaveuno 

Organized for the purpose of improviM buriness «>n^ti?«» i^.^' 

«ffig of Agriculfiral ^^^£tf}^jt^^^^ 
through more correct knowledge of the "Coet« of Doing uusineas. 

gtroQEsnoMS iro. i. 

In offering the within suggestions and rules we do so with the 
kn^ledge that no two business houses are on the same baas either 

"'f£e'"£kt^g?oTexSnL''nne can not safely be applied to 
anottier^OT should any general average of expense be used, you 
Muirteow for YOTJKSiir what touk expenses are and in the very 
woK out of them you will be rewarded, for to know «^ery impor- 
tmtdetoil of your business not only puts you m command but you 
S^tlos^a^ dollar unknowingly as is now true in many cases 

""SpSJci&Sown in the wilWn suggestions can be applied 
to any retail business with profit. If every merchant can be induced 
to ^7oyiA<> in his seUing prices all his costs, rumous competition will 
^p^ar, for the meaiuVe of profit can safely be left with the man 
who knows his exact expense. 



,' 



EXHIBITS. 



■XPLANATIOIT (OF ITEMS ON OPPOSITE PAGE [iN TABLE BELOW]). 



321 



1. Taxes. Include all taxes and licenses. 

2. Insurance. Fire and all protection except life insurance. 

3. Fuel, light and water. 

4. Rent. Include rent of all property used in the business or if 
owned by you, consider an amount equal to what it would cost if 
rented from others. 

5. Salaries. Include amounts to cover salaries of proprietor, part- 
ners, officers or members of their families employed in the business, 
equal to what their services would command elsewhere, if not already 
on your pay roll. 

6. Clerk hire. Incl. canvassers and extra labor. 

7. Advertising. Include all monejr expended in advertising, or en- 
tertainment of customers in promoting trade. 

8. FjXfress, telephone and telegraph. Include all amounts ex- 
pended for these items where not added to invoice price of goods or 
charged to customer. 

9. Office supplies, postage, etc. Include all bills for stationery, 
ink, pens, pencils, postage stamps, etc. 

10. Store supplies. Include all bills for wrapping paper, twine, 
boxes, crating, brooms, etc. 

11. Livery, drayage, etc. Figure in all expenses of these items 
where hired of others. 

12. Horses and wagons. If owned by you figure all expenses of 

their upkeep. 

13. Repairs. This item should include all amounts paid to keep 
buildings in order if not figured in rent, also repairs on fixtures and 
equipment. 

14. Depreciation. Include a proper deduction (some say 10%) 
from your last inventory of fixtures, tools and other personal prop- 
erty subject to decline in value because of wear and tear. Also de- 
preciate goods carried over which can not be sold at full or regular 

prices. 

16. Deductions. Include amounts allowed customers for damage 
or any cause whatever. 

16. Donations and subscriptions. Include money or goods do- 
nated to charity or public enterprises. (Private charities not in- 
cluded.) 

17. Losses. Include notes and accounts which are imcollectible, 
also amounts paid attorneys for collections, and goods lost or stolen 
or sent out and not charged. 

18. Miscellaneous expenses. Include all expenses not provided 

for above. 

19. Interest on total investment. Figure interest on your total 
assets at the beginning of your business year (cash, notes, accounts, 
merchandise, etc.). If this is done it insures your getting profits at 
least equal to interest had your capital been loaned instead of 
invested. 

68248'— 15 21 



'.Sk 




1% 




il 



322 



FABM-MACHINEBY TRADE ASSOCIATIONS. 



COST OF DOING BUSINESS — YK4BLT STATEMENT. 



1. Tnm. •..•... 






12. Home and Wagwis. 










13. Repairs 




3. TnimraiiM 












H. IHnraciatka 




3. Fntl. Tftriit. Wittr. Etc. 












1>. Dtdnctkniii ........,-- 




4 B«Bt 












16. Doitati<nis asd Subscriptions 

17. T/fflUMff 




& SalariM 














«. OtrkHira 












18. Miscellaneous expenses 
















19. Intwest on Total Investment 

Total expense 




&. Exprws, Ttl«ph. and Teleg 










«. Offiot Supplies, Postage, Etc 










Totel sales. 




10. Stan Snovlies 
















11. Livery. DraTase. Etc. 













^,4,^ 



«l 



Per Cent — Cost of doing business. 

Bum: — ^Divide Total Expense by Total Sales and result will be per 
cent of cost to do business. 

To fix selling prices see rule on next page [below]. 

TABLE FOB FINDING THE SELLING PRICE OF ANY ABTIOLE. 





Net per cent profit desired. 






Cost to do 








business. 














































1 


2 


3 


4 


5 


6 
79 


7 
78 


8 


9 


10 


11 


12 


13 


14 


15 


20 
65 


25 

60 


30 


35 


40 


50 


im 


84 


83 


S3 


81 


80 


77 


76 


75 


74 


73 


72 


71 


TO 


55 


50 


45 


35 


10% 


83 


82 


81 


80 


79 


78 


77 


76 


75 


74 


73 


72 


71 


TO 


69 


64 


59 


54 


49 


44 


34 


17% 


82 


81 


80 


79 


78 


77 


76 


75 


74 


73 


73 


71 


TO 


69 


6S 


63 


58 


53 


48 


43 


33 


|MJl 


81 


80 


79 


78 


77 


76 


75 


74 


73 


73 


71 


TO 


69 


68 


67 


62 


57 


52 


47 


42 


32 


19m 


80 


79 


78 


77 


76 


75 


74 


73 


73 


71 


TO 


69 


68 


67 


66 


61 


56 


51 


46 


41 


31 


30^ 


79 


78 


77 


76 


75 


74 


73 


73 


71 


TO 


69 


68 


67 


66 


65 


60 


55 


50 


45 


40 


30 


21% 


78 


77 


76 


75 


74 


73 


73 


71 


TO 


69 


68 


67 


66 


65 


64 


59 


54 


49 


44 


39 


29 


HVyL 


77 


76 


75 


74 


73 


72 


71 


TO 


69 


6S 


67 


66 


65 


64 


63 


58 


53 


48 


43 


38 


28 


39% 


7e 


75 


74 


73 


73 


71 


70 


69 


68 


67 


66 


65 


64 


63 


62 


57 


52 


47 


42 


37 


27 


^ 


75 


74 


73 


72 


71 


TO 


60 


68 


67 


66 


65 


64 


63 


62 


61 


56 


51 


46 


41 


36 


26 


74 


73 


73 


71 


TO 


69 


68 


67 


66 


65 


64 


63 


62 


61 


60 


55 


50 


45 


40 


35 


25 



BULE. 

Divide the cost (invoice price with freight added) by the fi^re in 
the column of " net rate per cent profit desired " on the line with per 
cent it costs you to do business. 

Example: 

If a wagon cost $60.00 

Freight 1. 20 

61.20 

You desire to make a net profit of 5% 

It costs yon to do business 19% 

Take the figure in column 5 on line with 19 which is 76 

76 1 61.2000 I $80.52=the selUng price. 

^608 

400 
380 
200 
152 



^ 



EXHIBITS. 



Exhibit 29. 



323 



COST SYSTEM BECOMMENDED FOR THE USE OF THE MEMBERS OF 
THE NATIONAL IMPLEMENT AND VEHICLE ASSOCIATION OF THE 
UNITED STATES OF AMERICA. 

(Published bj the AssocUitioii, 1912. General Offices: 76 W. Monroe Street, Chicago. 

Illinois.) 



[Index omitted.] 



FOREWORD. 



The value of an adequate system of Costs to a modern business 
is undiluted, for the greater portion of our trade evils, particularly 
those or competition, result from lack of knowledge of these essen- 
tials. If the line separating profit from loss is not illuminated and 
made to stand clearly before us by our cost and expense figures, 
how can we hope for gain and growth? It is rather to emphasize 
this than to present a perfect system that these suggestions are 
compiled. 

The present system is the result of the revision of a similar plan 
published by the National Plow Association and compiled by its 
Secretary, Mr. C. E. Sanders, under the direction of Mr. G. W. 
Crampton, who continues as Chairman of the Committee on Manu- 
facturing Costs of this Association. This revision was submitted 
by Mr. Crampton at the Annual Convention of the National Imple- 
ment & Vehicle Association at Cleveland, Ohio, October 24, 1912. 
The Convention ordered the publication of the system for the use 
of the members. 

The principles of this system are of general application, and they 
can be used oy all concerns in the lines comprehended within the 
term — '^ Farm Operating Equipment." 

THE SYSTE3I IN OUTLINE. 

The method of determination of the cost of production, and mar- 
keting or distribution of any article, involves many considerations 
and the detailed treatment of the elements of this cost. In general 
the total cost is made up of the cost of manufacture, and the cost of 
marketing or distribution. Each of these main divisions includes so 
many elements that it is considered advisable to set forth in outline 
the phases which will be considered. They are as follows : 

1. COST OF GOODS IN WAREHOUSE. 

This includes all manufacturing expense imder the following head- 
ings : 

(a) Costs of material. 

(b) Costs of labor. 

(1) Productive labor. 

(2) Non-Productive labor. 

(c) Other manufacturing expense. 

2. BALES AND ADMINISTBATIVE EXPENSE. 

Sales and Administrative Expense is considered under two head- 
ings depending upon whether the distribution is to the jobber or to 
the retail dealer. 



^ 




II 



I 



324 



VABM-MAOHUnBBY TBMȣ ASSOCIATIONS. 



•• VOVAL KZPENSK. 



The totil expense is, of course, the sum of all contributing elements 
considered. If the delivered cost is desired, freight charges should 
be added. 



THE SYSTEM IN DETAIL. 



The Cost ow Goods in Wabbhouss. 



MATEBIAL, 



Items Included. 

Steel 

Malleables 

Lumber 

Bolts 

and all other materials. 

General Considerations, 

All material should be considered at Cost Price. 

In figuring steel and lumber use sizes purchased, i. e., use size and 
weight before drilling, punching or cutting is done. 

A proper percentage for waste should be allowed, including waste 
bv errors in manufacture or defective material or material rendered 

obsolete. 

An amount should be figured and reduced to a percentage to cover 
loss in using material not according to specifications or material pur- 
chased from jobbing stock on which there is waste. 

This percentage should also include extra freight paid, bonus 
prices and all differences in prices paid in excess of contract on 
which costs are based. 

Unless provided for by an interest charge on capital and surplus, 
as explained under Other Manufacturing Expenses, the interest 
charge should be added to cost of material by reason of carrying 
charges on material from the average date of purchase imtil the 
average date of delivery of goods in the warehouse. In the figuring 
of this average, material carried on inventory should be taken into 
account. In figuring the cost of lumber, which is carried on longer 
time, the carrying charge should be considered. 

LABOB. 

All labor is divided into two general classes— Productive labor and